Correlation Between KB Financial and Green Cross
Can any of the company-specific risk be diversified away by investing in both KB Financial and Green Cross 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 Green Cross 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 Green Cross Medical, you can compare the effects of market volatilities on KB Financial and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Green Cross.
Diversification Opportunities for KB Financial and Green Cross
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 105560 and Green is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of KB Financial i.e., KB Financial and Green Cross go up and down completely randomly.
Pair Corralation between KB Financial and Green Cross
Assuming the 90 days trading horizon KB Financial is expected to generate 6.8 times less return on investment than Green Cross. But when comparing it to its historical volatility, KB Financial Group is 3.69 times less risky than Green Cross. It trades about 0.14 of its potential returns per unit of risk. Green Cross Medical is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 356,000 in Green Cross Medical on October 14, 2024 and sell it today you would earn a total of 83,000 from holding Green Cross Medical or generate 23.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Green Cross Medical
Performance |
| Timeline |
| KB Financial Group |
| Green Cross Medical |
KB Financial and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Green Cross
The main advantage of trading using opposite KB Financial and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| KB Financial vs. Koryo Credit Information | KB Financial vs. FOODWELL Co | KB Financial vs. System and Application | KB Financial vs. Haitai Confectionery Foods |
| Green Cross vs. KB Financial Group | Green Cross vs. Koryo Credit Information | Green Cross vs. Genie Music | Green Cross vs. Jb Financial |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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