Correlation Between KB Financial and Nature
Can any of the company-specific risk be diversified away by investing in both KB Financial and Nature at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KB Financial and Nature into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB Financial Group and Nature and Environment, you can compare the effects of market volatilities on KB Financial and Nature and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KB Financial with a short position of Nature. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Nature.
Diversification Opportunities for KB Financial and Nature
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between 105560 and Nature is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Nature and Environment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nature and Environment and KB Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KB Financial Group are associated (or correlated) with Nature. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nature and Environment has no effect on the direction of KB Financial i.e., KB Financial and Nature go up and down completely randomly.
Pair Corralation between KB Financial and Nature
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.25 times more return on investment than Nature. However, KB Financial is 1.25 times more volatile than Nature and Environment. It trades about 0.37 of its potential returns per unit of risk. Nature and Environment is currently generating about -0.22 per unit of risk. If you would invest 8,550,000 in KB Financial Group on November 7, 2024 and sell it today you would earn a total of 620,000 from holding KB Financial Group or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Nature and Environment
Performance |
| Timeline |
| KB Financial Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nature and Environment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KB Financial and Nature Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Nature
The main advantage of trading using opposite KB Financial and Nature positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Nature can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nature will offset losses from the drop in Nature's long position.| KB Financial vs. INFINITT Healthcare Co | KB Financial vs. Dongbang Transport Logistics | KB Financial vs. SK Chemicals Co | KB Financial vs. Ssangyong Materials Corp |
| Nature vs. FNC Entertainment Co | Nature vs. Barunson Entertainment Arts | Nature vs. LAKE MATERIALS LTD | Nature vs. JYP Entertainment Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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