Correlation Between KB Financial and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both KB Financial and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on KB Financial and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Hanjoo Light.
Diversification Opportunities for KB Financial and Hanjoo Light
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Hanjoo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of KB Financial i.e., KB Financial and Hanjoo Light go up and down completely randomly.
Pair Corralation between KB Financial and Hanjoo Light
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.65 times more return on investment than Hanjoo Light. However, KB Financial Group is 1.53 times less risky than Hanjoo Light. It trades about 0.08 of its potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.08 per unit of risk. If you would invest 4,853,564 in KB Financial Group on September 12, 2024 and sell it today you would earn a total of 3,476,436 from holding KB Financial Group or generate 71.63% 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. Hanjoo Light Metal
Performance |
| Timeline |
| KB Financial Group |
| Hanjoo Light Metal |
KB Financial and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Hanjoo Light
The main advantage of trading using opposite KB Financial and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light'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 |
| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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