Correlation Between KB Financial and FNSTech Co
Can any of the company-specific risk be diversified away by investing in both KB Financial and FNSTech Co 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 FNSTech Co 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 FNSTech Co, you can compare the effects of market volatilities on KB Financial and FNSTech Co 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 FNSTech Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and FNSTech Co.
Diversification Opportunities for KB Financial and FNSTech Co
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and FNSTech is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and FNSTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FNSTech Co 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 FNSTech Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FNSTech Co has no effect on the direction of KB Financial i.e., KB Financial and FNSTech Co go up and down completely randomly.
Pair Corralation between KB Financial and FNSTech Co
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the FNSTech Co. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.49 times less risky than FNSTech Co. The stock trades about -0.14 of its potential returns per unit of risk. The FNSTech Co is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 811,000 in FNSTech Co on September 12, 2024 and sell it today you would lose (86,000) from holding FNSTech Co or give up 10.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. FNSTech Co
Performance |
| Timeline |
| KB Financial Group |
| FNSTech Co |
KB Financial and FNSTech Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and FNSTech Co
The main advantage of trading using opposite KB Financial and FNSTech Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, FNSTech Co 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 FNSTech Co will offset losses from the drop in FNSTech Co'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 |
| FNSTech Co vs. Samsung Electronics Co | FNSTech Co vs. Samsung Electronics Co | FNSTech Co vs. LG Energy Solution | FNSTech Co vs. SK Hynix |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |