Correlation Between KB Financial and Humax
Can any of the company-specific risk be diversified away by investing in both KB Financial and Humax 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 Humax 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 Humax Co, you can compare the effects of market volatilities on KB Financial and Humax 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 Humax. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Humax.
Diversification Opportunities for KB Financial and Humax
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Humax is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax 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 Humax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of KB Financial i.e., KB Financial and Humax go up and down completely randomly.
Pair Corralation between KB Financial and Humax
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.1 times more return on investment than Humax. However, KB Financial is 1.1 times more volatile than Humax Co. It trades about -0.07 of its potential returns per unit of risk. Humax Co is currently generating about -0.42 per unit of risk. If you would invest 9,720,000 in KB Financial Group on September 13, 2024 and sell it today you would lose (1,020,000) from holding KB Financial Group or give up 10.49% 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. Humax Co
Performance |
| Timeline |
| KB Financial Group |
| Humax |
KB Financial and Humax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Humax
The main advantage of trading using opposite KB Financial and Humax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Humax 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 Humax will offset losses from the drop in Humax'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 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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