Correlation Between KB Financial and Newtree CoLtd
Can any of the company-specific risk be diversified away by investing in both KB Financial and Newtree CoLtd 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 Newtree CoLtd 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 Newtree CoLtd, you can compare the effects of market volatilities on KB Financial and Newtree CoLtd 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 Newtree CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Newtree CoLtd.
Diversification Opportunities for KB Financial and Newtree CoLtd
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Newtree is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Newtree CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtree CoLtd 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 Newtree CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtree CoLtd has no effect on the direction of KB Financial i.e., KB Financial and Newtree CoLtd go up and down completely randomly.
Pair Corralation between KB Financial and Newtree CoLtd
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.37 times more return on investment than Newtree CoLtd. However, KB Financial Group is 2.72 times less risky than Newtree CoLtd. It trades about 0.09 of its potential returns per unit of risk. Newtree CoLtd is currently generating about -0.28 per unit of risk. If you would invest 9,550,000 in KB Financial Group on August 30, 2024 and sell it today you would earn a total of 320,000 from holding KB Financial Group or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Newtree CoLtd
Performance |
| Timeline |
| KB Financial Group |
| Newtree CoLtd |
KB Financial and Newtree CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Newtree CoLtd
The main advantage of trading using opposite KB Financial and Newtree CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Newtree CoLtd 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 Newtree CoLtd will offset losses from the drop in Newtree CoLtd's long position.| KB Financial vs. Cube Entertainment | KB Financial vs. Dreamus Company | KB Financial vs. LG Energy Solution | KB Financial vs. Dongwon System |
| Newtree CoLtd vs. KakaoBank Corp | Newtree CoLtd vs. Pureun Mutual Savings | Newtree CoLtd vs. DB Insurance Co | Newtree CoLtd vs. SCI Information Service |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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