Correlation Between KB Financial and NH SPAC
Can any of the company-specific risk be diversified away by investing in both KB Financial and NH SPAC 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 NH SPAC 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 NH SPAC 2, you can compare the effects of market volatilities on KB Financial and NH SPAC 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 NH SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and NH SPAC.
Diversification Opportunities for KB Financial and NH SPAC
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and 206640 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and NH SPAC 2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NH SPAC 2 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 NH SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NH SPAC 2 has no effect on the direction of KB Financial i.e., KB Financial and NH SPAC go up and down completely randomly.
Pair Corralation between KB Financial and NH SPAC
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.75 times more return on investment than NH SPAC. However, KB Financial Group is 1.33 times less risky than NH SPAC. It trades about 0.07 of its potential returns per unit of risk. NH SPAC 2 is currently generating about 0.05 per unit of risk. If you would invest 4,599,587 in KB Financial Group on September 13, 2024 and sell it today you would earn a total of 4,100,413 from holding KB Financial Group or generate 89.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. NH SPAC 2
Performance |
| Timeline |
| KB Financial Group |
| NH SPAC 2 |
KB Financial and NH SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and NH SPAC
The main advantage of trading using opposite KB Financial and NH SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, NH SPAC 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 NH SPAC will offset losses from the drop in NH SPAC'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 |
| NH SPAC vs. Samsung Electronics Co | NH SPAC vs. Samsung Electronics Co | NH SPAC vs. SK Hynix | NH SPAC vs. SK Holdings Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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