Correlation Between KB Financial and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both KB Financial and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on KB Financial and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and SEOJEON ELECTRIC.
Diversification Opportunities for KB Financial and SEOJEON ELECTRIC
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 105560 and SEOJEON is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of KB Financial i.e., KB Financial and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between KB Financial and SEOJEON ELECTRIC
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.62 times more return on investment than SEOJEON ELECTRIC. However, KB Financial Group is 1.61 times less risky than SEOJEON ELECTRIC. It trades about 0.1 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about 0.02 per unit of risk. If you would invest 5,265,773 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 4,354,227 from holding KB Financial Group or generate 82.69% 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. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| KB Financial Group |
| SEOJEON ELECTRIC MAC |
KB Financial and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and SEOJEON ELECTRIC
The main advantage of trading using opposite KB Financial and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC's long position.| KB Financial vs. Korea Information Engineering | KB Financial vs. SCI Information Service | KB Financial vs. Atinum Investment Co | KB Financial vs. Samyung Trading Co |
| SEOJEON ELECTRIC vs. Dongil Technology | SEOJEON ELECTRIC vs. Lotte Energy Materials | SEOJEON ELECTRIC vs. PI Advanced Materials | SEOJEON ELECTRIC vs. Daou Technology |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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