Correlation Between KB Financial and WOOJUNG BIO
Can any of the company-specific risk be diversified away by investing in both KB Financial and WOOJUNG BIO 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 WOOJUNG BIO 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 WOOJUNG BIO, you can compare the effects of market volatilities on KB Financial and WOOJUNG BIO 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 WOOJUNG BIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and WOOJUNG BIO.
Diversification Opportunities for KB Financial and WOOJUNG BIO
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 105560 and WOOJUNG is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and WOOJUNG BIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOOJUNG BIO 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 WOOJUNG BIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOOJUNG BIO has no effect on the direction of KB Financial i.e., KB Financial and WOOJUNG BIO go up and down completely randomly.
Pair Corralation between KB Financial and WOOJUNG BIO
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the WOOJUNG BIO. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.32 times less risky than WOOJUNG BIO. The stock trades about -0.06 of its potential returns per unit of risk. The WOOJUNG BIO is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 170,000 in WOOJUNG BIO on November 30, 2024 and sell it today you would lose (7,300) from holding WOOJUNG BIO or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. WOOJUNG BIO
Performance |
| Timeline |
| KB Financial Group |
| WOOJUNG BIO |
KB Financial and WOOJUNG BIO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and WOOJUNG BIO
The main advantage of trading using opposite KB Financial and WOOJUNG BIO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, WOOJUNG BIO 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 WOOJUNG BIO will offset losses from the drop in WOOJUNG BIO's long position.| KB Financial vs. Dongkuk Steel Mill | KB Financial vs. Korea Steel Co | KB Financial vs. Husteel | KB Financial vs. Young Heung Iron |
| WOOJUNG BIO vs. NH Investment Securities | WOOJUNG BIO vs. LG Household Healthcare | WOOJUNG BIO vs. Daol Investment Securities | WOOJUNG BIO vs. KTB Investment Securities |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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