Correlation Between KB Financial and Hyundai Industrial
Can any of the company-specific risk be diversified away by investing in both KB Financial and Hyundai Industrial 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 Hyundai Industrial 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 Hyundai Industrial Co, you can compare the effects of market volatilities on KB Financial and Hyundai Industrial 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 Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Hyundai Industrial.
Diversification Opportunities for KB Financial and Hyundai Industrial
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 105560 and Hyundai is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial 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 Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of KB Financial i.e., KB Financial and Hyundai Industrial go up and down completely randomly.
Pair Corralation between KB Financial and Hyundai Industrial
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.06 times more return on investment than Hyundai Industrial. However, KB Financial is 1.06 times more volatile than Hyundai Industrial Co. It trades about 0.12 of its potential returns per unit of risk. Hyundai Industrial Co is currently generating about -0.04 per unit of risk. If you would invest 4,878,167 in KB Financial Group on September 4, 2024 and sell it today you would earn a total of 4,761,833 from holding KB Financial Group or generate 97.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Hyundai Industrial Co
Performance |
| Timeline |
| KB Financial Group |
| Hyundai Industrial |
KB Financial and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Hyundai Industrial
The main advantage of trading using opposite KB Financial and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Hyundai Industrial 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 Hyundai Industrial will offset losses from the drop in Hyundai Industrial's long position.| KB Financial vs. Dongjin Semichem Co | KB Financial vs. AhnLab Inc | KB Financial vs. Posco ICT | KB Financial vs. CJ ENM |
| Hyundai Industrial vs. Songwon Industrial Co | Hyundai Industrial vs. Youngsin Metal Industrial | Hyundai Industrial vs. Wireless Power Amplifier | Hyundai Industrial vs. Lotte Data Communication |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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