Correlation Between KB Financial and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both KB Financial and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on KB Financial and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Dongwoo Farm.
Diversification Opportunities for KB Financial and Dongwoo Farm
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 105560 and Dongwoo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of KB Financial i.e., KB Financial and Dongwoo Farm go up and down completely randomly.
Pair Corralation between KB Financial and Dongwoo Farm
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.23 times more return on investment than Dongwoo Farm. However, KB Financial is 1.23 times more volatile than Dongwoo Farm To. It trades about 0.45 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about 0.0 per unit of risk. If you would invest 8,340,000 in KB Financial Group on November 3, 2024 and sell it today you would earn a total of 830,000 from holding KB Financial Group or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Dongwoo Farm To
Performance |
| Timeline |
| KB Financial Group |
| Dongwoo Farm To |
KB Financial and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Dongwoo Farm
The main advantage of trading using opposite KB Financial and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| KB Financial vs. Cloud Air CoLtd | KB Financial vs. Korea Investment Holdings | KB Financial vs. SBI Investment KOREA | KB Financial vs. Innowireless Co |
| Dongwoo Farm vs. Daiyang Metal Co | Dongwoo Farm vs. Ssangyong Information Communication | Dongwoo Farm vs. Heungkuk Metaltech CoLtd | Dongwoo Farm vs. Choil Aluminum |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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