Correlation Between KB Financial and Ssangyong Materials
Can any of the company-specific risk be diversified away by investing in both KB Financial and Ssangyong Materials 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 Ssangyong Materials 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 Ssangyong Materials Corp, you can compare the effects of market volatilities on KB Financial and Ssangyong Materials 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 Ssangyong Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Ssangyong Materials.
Diversification Opportunities for KB Financial and Ssangyong Materials
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 105560 and Ssangyong is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Ssangyong Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Materials Corp 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 Ssangyong Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Materials Corp has no effect on the direction of KB Financial i.e., KB Financial and Ssangyong Materials go up and down completely randomly.
Pair Corralation between KB Financial and Ssangyong Materials
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the Ssangyong Materials. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.41 times less risky than Ssangyong Materials. The stock trades about -0.05 of its potential returns per unit of risk. The Ssangyong Materials Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 247,000 in Ssangyong Materials Corp on October 26, 2024 and sell it today you would lose (21,500) from holding Ssangyong Materials Corp or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Ssangyong Materials Corp
Performance |
| Timeline |
| KB Financial Group |
| Ssangyong Materials Corp |
KB Financial and Ssangyong Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Ssangyong Materials
The main advantage of trading using opposite KB Financial and Ssangyong Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Ssangyong Materials 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 Ssangyong Materials will offset losses from the drop in Ssangyong Materials' long position.| KB Financial vs. Daejung Chemicals Metals | KB Financial vs. MetaLabs Co | KB Financial vs. Dongbang Transport Logistics | KB Financial vs. Kbi Metal Co |
| Ssangyong Materials vs. KB Financial Group | Ssangyong Materials vs. Shinhan Financial Group | Ssangyong Materials vs. Hana Financial | Ssangyong Materials vs. Woori Financial Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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