Correlation Between KB Financial and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both KB Financial and SK Bioscience 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 SK Bioscience 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 SK Bioscience Co, you can compare the effects of market volatilities on KB Financial and SK Bioscience 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 SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and SK Bioscience.
Diversification Opportunities for KB Financial and SK Bioscience
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and 302440 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience 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 SK Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Bioscience has no effect on the direction of KB Financial i.e., KB Financial and SK Bioscience go up and down completely randomly.
Pair Corralation between KB Financial and SK Bioscience
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.59 times more return on investment than SK Bioscience. However, KB Financial Group is 1.68 times less risky than SK Bioscience. It trades about 0.13 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.17 per unit of risk. If you would invest 9,180,000 in KB Financial Group on September 2, 2024 and sell it today you would earn a total of 440,000 from holding KB Financial Group or generate 4.79% 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. SK Bioscience Co
Performance |
| Timeline |
| KB Financial Group |
| SK Bioscience |
KB Financial and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and SK Bioscience
The main advantage of trading using opposite KB Financial and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, SK Bioscience 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 SK Bioscience will offset losses from the drop in SK Bioscience's long position.| KB Financial vs. SS TECH | KB Financial vs. Eagle Veterinary Technology | KB Financial vs. Chin Yang Chemical | KB Financial vs. Shinsung Delta Tech |
| SK Bioscience vs. Shinsegae Information Communication | SK Bioscience vs. Eagon Industrial Co | SK Bioscience vs. Nable Communications | SK Bioscience vs. Nice Information Telecommunication |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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