Correlation Between KB Financial and Asia Technology
Can any of the company-specific risk be diversified away by investing in both KB Financial and Asia Technology 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 Asia Technology 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 Asia Technology Co, you can compare the effects of market volatilities on KB Financial and Asia Technology 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 Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Asia Technology.
Diversification Opportunities for KB Financial and Asia Technology
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 105560 and Asia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology 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 Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of KB Financial i.e., KB Financial and Asia Technology go up and down completely randomly.
Pair Corralation between KB Financial and Asia Technology
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the Asia Technology. In addition to that, KB Financial is 1.78 times more volatile than Asia Technology Co. It trades about -0.06 of its total potential returns per unit of risk. Asia Technology Co is currently generating about 0.04 per unit of volatility. If you would invest 202,500 in Asia Technology Co on November 30, 2024 and sell it today you would earn a total of 3,000 from holding Asia Technology Co or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Asia Technology Co
Performance |
| Timeline |
| KB Financial Group |
| Asia Technology |
KB Financial and Asia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Asia Technology
The main advantage of trading using opposite KB Financial and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Asia Technology 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 Asia Technology will offset losses from the drop in Asia Technology's long position.| KB Financial vs. Dongkuk Steel Mill | KB Financial vs. Korea Steel Co | KB Financial vs. Husteel | KB Financial vs. Young Heung Iron |
| Asia Technology vs. Busan Industrial Co | Asia Technology vs. Busan Ind | Asia Technology vs. Mirae Asset Daewoo | Asia Technology vs. UNISEM Co |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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