Correlation Between KB Financial and CG Hi
Can any of the company-specific risk be diversified away by investing in both KB Financial and CG Hi 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 CG Hi 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 CG Hi Tech, you can compare the effects of market volatilities on KB Financial and CG Hi 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 CG Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and CG Hi.
Diversification Opportunities for KB Financial and CG Hi
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between 105560 and 264660 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and CG Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CG Hi Tech 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 CG Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CG Hi Tech has no effect on the direction of KB Financial i.e., KB Financial and CG Hi go up and down completely randomly.
Pair Corralation between KB Financial and CG Hi
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the CG Hi. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 3.25 times less risky than CG Hi. The stock trades about -0.06 of its potential returns per unit of risk. The CG Hi Tech is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 931,000 in CG Hi Tech on November 30, 2024 and sell it today you would earn a total of 492,000 from holding CG Hi Tech or generate 52.85% 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. CG Hi Tech
Performance |
| Timeline |
| KB Financial Group |
| CG Hi Tech |
KB Financial and CG Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and CG Hi
The main advantage of trading using opposite KB Financial and CG Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, CG Hi 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 CG Hi will offset losses from the drop in CG Hi'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 |
| CG Hi vs. Automobile Pc | CG Hi vs. Ssangyong Information Communication | CG Hi vs. Duksan Hi Metal | CG Hi vs. Daejung Chemicals Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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