Correlation Between KB Financial and KT Submarine
Can any of the company-specific risk be diversified away by investing in both KB Financial and KT Submarine 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 KT Submarine 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 KT Submarine Telecom, you can compare the effects of market volatilities on KB Financial and KT Submarine 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 KT Submarine. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and KT Submarine.
Diversification Opportunities for KB Financial and KT Submarine
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 105560 and 060370 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and KT Submarine Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Submarine Telecom 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 KT Submarine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Submarine Telecom has no effect on the direction of KB Financial i.e., KB Financial and KT Submarine go up and down completely randomly.
Pair Corralation between KB Financial and KT Submarine
Assuming the 90 days trading horizon KB Financial is expected to generate 2.01 times less return on investment than KT Submarine. But when comparing it to its historical volatility, KB Financial Group is 1.53 times less risky than KT Submarine. It trades about 0.06 of its potential returns per unit of risk. KT Submarine Telecom is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 570,000 in KT Submarine Telecom on October 30, 2024 and sell it today you would earn a total of 1,182,000 from holding KT Submarine Telecom or generate 207.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.21% |
| Values | Daily Returns |
KB Financial Group vs. KT Submarine Telecom
Performance |
| Timeline |
| KB Financial Group |
| KT Submarine Telecom |
KB Financial and KT Submarine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and KT Submarine
The main advantage of trading using opposite KB Financial and KT Submarine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, KT Submarine 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 KT Submarine will offset losses from the drop in KT Submarine's long position.| KB Financial vs. Bookook Steel | KB Financial vs. LEENO Industrial | KB Financial vs. BGF Retail Co | KB Financial vs. Industrial Bank |
| KT Submarine vs. Pureun Mutual Savings | KT Submarine vs. CG Hi Tech | KT Submarine vs. Sangsangin Investment Securities | KT Submarine vs. Atinum Investment 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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