Correlation Between KB Financial and Lion Chemtech
Can any of the company-specific risk be diversified away by investing in both KB Financial and Lion Chemtech 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 Lion Chemtech 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 Lion Chemtech Co, you can compare the effects of market volatilities on KB Financial and Lion Chemtech 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 Lion Chemtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Lion Chemtech.
Diversification Opportunities for KB Financial and Lion Chemtech
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Lion is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Lion Chemtech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Chemtech 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 Lion Chemtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Chemtech has no effect on the direction of KB Financial i.e., KB Financial and Lion Chemtech go up and down completely randomly.
Pair Corralation between KB Financial and Lion Chemtech
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.35 times more return on investment than Lion Chemtech. However, KB Financial Group is 2.85 times less risky than Lion Chemtech. It trades about 0.1 of its potential returns per unit of risk. Lion Chemtech Co is currently generating about -0.25 per unit of risk. If you would invest 8,700,000 in KB Financial Group on October 24, 2024 and sell it today you would earn a total of 190,000 from holding KB Financial Group or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Lion Chemtech Co
Performance |
| Timeline |
| KB Financial Group |
| Lion Chemtech |
KB Financial and Lion Chemtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Lion Chemtech
The main advantage of trading using opposite KB Financial and Lion Chemtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Lion Chemtech 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 Lion Chemtech will offset losses from the drop in Lion Chemtech's long position.| KB Financial vs. Derkwoo Electronics Co | KB Financial vs. Samyoung Electronics Co | KB Financial vs. DAEDUCK ELECTRONICS CoLtd | KB Financial vs. Cuckoo Electronics Co |
| Lion Chemtech vs. DB Insurance Co | Lion Chemtech vs. KB Financial Group | Lion Chemtech vs. Nable Communications | Lion Chemtech vs. Industrial Bank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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