Correlation Between KB Financial and TAEYANG
Can any of the company-specific risk be diversified away by investing in both KB Financial and TAEYANG 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 TAEYANG 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 TAEYANG, you can compare the effects of market volatilities on KB Financial and TAEYANG 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 TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and TAEYANG.
Diversification Opportunities for KB Financial and TAEYANG
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 105560 and TAEYANG is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG 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 TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of KB Financial i.e., KB Financial and TAEYANG go up and down completely randomly.
Pair Corralation between KB Financial and TAEYANG
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the TAEYANG. In addition to that, KB Financial is 2.42 times more volatile than TAEYANG. It trades about -0.1 of its total potential returns per unit of risk. TAEYANG is currently generating about 0.08 per unit of volatility. If you would invest 622,000 in TAEYANG on September 19, 2024 and sell it today you would earn a total of 14,000 from holding TAEYANG or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. TAEYANG
Performance |
| Timeline |
| KB Financial Group |
| TAEYANG |
KB Financial and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and TAEYANG
The main advantage of trading using opposite KB Financial and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| KB Financial vs. Shinhan Financial Group | KB Financial vs. Hana Financial | KB Financial vs. Woori Financial Group | KB Financial vs. Samsung Electronics Co |
| TAEYANG vs. Kukdo Chemical Co | TAEYANG vs. ITM Semiconductor Co | TAEYANG vs. Miwon Chemical | TAEYANG vs. Youngbo Chemical 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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