Correlation Between KB Financial and Ecopro
Can any of the company-specific risk be diversified away by investing in both KB Financial and Ecopro 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 Ecopro 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 Ecopro Co, you can compare the effects of market volatilities on KB Financial and Ecopro 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 Ecopro. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Ecopro.
Diversification Opportunities for KB Financial and Ecopro
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 105560 and Ecopro is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Ecopro Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecopro 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 Ecopro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecopro has no effect on the direction of KB Financial i.e., KB Financial and Ecopro go up and down completely randomly.
Pair Corralation between KB Financial and Ecopro
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the Ecopro. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.27 times less risky than Ecopro. The stock trades about -0.24 of its potential returns per unit of risk. The Ecopro Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 6,230,000 in Ecopro Co on November 18, 2024 and sell it today you would lose (160,000) from holding Ecopro Co or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Ecopro Co
Performance |
| Timeline |
| KB Financial Group |
| Ecopro |
KB Financial and Ecopro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Ecopro
The main advantage of trading using opposite KB Financial and Ecopro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Ecopro 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 Ecopro will offset losses from the drop in Ecopro's long position.| KB Financial vs. Korean Drug Co | KB Financial vs. DataSolution | KB Financial vs. AeroSpace Technology of | KB Financial vs. Green Cross Medical |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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