Correlation Between KB Financial and PNC Technologies
Can any of the company-specific risk be diversified away by investing in both KB Financial and PNC Technologies 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 PNC Technologies 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 PNC Technologies co, you can compare the effects of market volatilities on KB Financial and PNC Technologies 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 PNC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and PNC Technologies.
Diversification Opportunities for KB Financial and PNC Technologies
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 105560 and PNC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and PNC Technologies co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Technologies 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 PNC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Technologies has no effect on the direction of KB Financial i.e., KB Financial and PNC Technologies go up and down completely randomly.
Pair Corralation between KB Financial and PNC Technologies
Assuming the 90 days trading horizon KB Financial is expected to generate 2.19 times less return on investment than PNC Technologies. But when comparing it to its historical volatility, KB Financial Group is 1.38 times less risky than PNC Technologies. It trades about 0.21 of its potential returns per unit of risk. PNC Technologies co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 397,000 in PNC Technologies co on October 28, 2024 and sell it today you would earn a total of 41,000 from holding PNC Technologies co or generate 10.33% 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. PNC Technologies co
Performance |
Timeline |
KB Financial Group |
PNC Technologies |
KB Financial and PNC Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and PNC Technologies
The main advantage of trading using opposite KB Financial and PNC Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, PNC Technologies 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 PNC Technologies will offset losses from the drop in PNC Technologies' long position.KB Financial vs. Samsung Electronics Co | KB Financial vs. Samsung Electronics Co | KB Financial vs. SK Hynix | KB Financial vs. HMM Co |
PNC Technologies vs. Hansol Homedeco Co | PNC Technologies vs. TS Investment Corp | PNC Technologies vs. Alton Sports CoLtd | PNC Technologies vs. Mobile Appliance |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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