Correlation Between KB Financial and Jeju Beer
Can any of the company-specific risk be diversified away by investing in both KB Financial and Jeju Beer 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 Jeju Beer 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 Jeju Beer Co, you can compare the effects of market volatilities on KB Financial and Jeju Beer 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 Jeju Beer. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Jeju Beer.
Diversification Opportunities for KB Financial and Jeju Beer
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 105560 and Jeju is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Jeju Beer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Beer 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 Jeju Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Beer has no effect on the direction of KB Financial i.e., KB Financial and Jeju Beer go up and down completely randomly.
Pair Corralation between KB Financial and Jeju Beer
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.53 times more return on investment than Jeju Beer. However, KB Financial Group is 1.88 times less risky than Jeju Beer. It trades about 0.06 of its potential returns per unit of risk. Jeju Beer Co is currently generating about -0.03 per unit of risk. If you would invest 5,365,721 in KB Financial Group on October 16, 2024 and sell it today you would earn a total of 3,564,279 from holding KB Financial Group or generate 66.43% 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. Jeju Beer Co
Performance |
| Timeline |
| KB Financial Group |
| Jeju Beer |
KB Financial and Jeju Beer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Jeju Beer
The main advantage of trading using opposite KB Financial and Jeju Beer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Jeju Beer 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 Jeju Beer will offset losses from the drop in Jeju Beer's long position.| KB Financial vs. N2Tech Co | KB Financial vs. Asiana Airlines | KB Financial vs. Daiyang Metal Co | KB Financial vs. DRB Industrial Co |
| Jeju Beer vs. Eagon Industrial Co | Jeju Beer vs. KB Financial Group | Jeju Beer vs. Daejung Chemicals Metals | Jeju Beer vs. Pyung Hwa Industrial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |