Correlation Between KB Financial and MEDICOX
Can any of the company-specific risk be diversified away by investing in both KB Financial and MEDICOX 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 MEDICOX 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 MEDICOX Co, you can compare the effects of market volatilities on KB Financial and MEDICOX 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 MEDICOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and MEDICOX.
Diversification Opportunities for KB Financial and MEDICOX
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 105560 and MEDICOX is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and MEDICOX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICOX 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 MEDICOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICOX has no effect on the direction of KB Financial i.e., KB Financial and MEDICOX go up and down completely randomly.
Pair Corralation between KB Financial and MEDICOX
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.06 times more return on investment than MEDICOX. However, KB Financial is 1.06 times more volatile than MEDICOX Co. It trades about 0.15 of its potential returns per unit of risk. MEDICOX Co is currently generating about -0.16 per unit of risk. If you would invest 8,580,000 in KB Financial Group on October 21, 2024 and sell it today you would earn a total of 280,000 from holding KB Financial Group or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
KB Financial Group vs. MEDICOX Co
Performance |
| Timeline |
| KB Financial Group |
| MEDICOX |
KB Financial and MEDICOX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and MEDICOX
The main advantage of trading using opposite KB Financial and MEDICOX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, MEDICOX 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 MEDICOX will offset losses from the drop in MEDICOX's long position.| KB Financial vs. BGF Retail Co | KB Financial vs. Hanwha Life Insurance | KB Financial vs. Sajo Seafood | KB Financial vs. Tway Air Co |
| MEDICOX vs. DONGKUK TED METAL | MEDICOX vs. Kakao Games Corp | MEDICOX vs. Formetal Co | MEDICOX vs. PH Tech 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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