Correlation Between KB Financial and TPC Mechatronics
Can any of the company-specific risk be diversified away by investing in both KB Financial and TPC Mechatronics 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 TPC Mechatronics 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 TPC Mechatronics, you can compare the effects of market volatilities on KB Financial and TPC Mechatronics 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 TPC Mechatronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and TPC Mechatronics.
Diversification Opportunities for KB Financial and TPC Mechatronics
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and TPC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and TPC Mechatronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPC Mechatronics 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 TPC Mechatronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPC Mechatronics has no effect on the direction of KB Financial i.e., KB Financial and TPC Mechatronics go up and down completely randomly.
Pair Corralation between KB Financial and TPC Mechatronics
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.6 times more return on investment than TPC Mechatronics. However, KB Financial Group is 1.66 times less risky than TPC Mechatronics. It trades about 0.1 of its potential returns per unit of risk. TPC Mechatronics is currently generating about -0.01 per unit of risk. If you would invest 4,556,486 in KB Financial Group on August 31, 2024 and sell it today you would earn a total of 5,243,514 from holding KB Financial Group or generate 115.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
KB Financial Group vs. TPC Mechatronics
Performance |
| Timeline |
| KB Financial Group |
| TPC Mechatronics |
KB Financial and TPC Mechatronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and TPC Mechatronics
The main advantage of trading using opposite KB Financial and TPC Mechatronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, TPC Mechatronics 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 TPC Mechatronics will offset losses from the drop in TPC Mechatronics' long position.| KB Financial vs. Inzi Display CoLtd | KB Financial vs. Samsung Publishing Co | KB Financial vs. Pan Entertainment Co | KB Financial vs. Kaonmedia Co |
| TPC Mechatronics vs. Digital Multimedia Technology | TPC Mechatronics vs. Kaonmedia Co | TPC Mechatronics vs. FNC Entertainment Co | TPC Mechatronics vs. MEDIANA CoLtd |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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