Correlation Between KB Financial and IL Science
Can any of the company-specific risk be diversified away by investing in both KB Financial and IL Science 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 IL Science 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 IL Science Co, you can compare the effects of market volatilities on KB Financial and IL Science 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 IL Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and IL Science.
Diversification Opportunities for KB Financial and IL Science
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and 307180 is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and IL Science Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IL Science 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 IL Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IL Science has no effect on the direction of KB Financial i.e., KB Financial and IL Science go up and down completely randomly.
Pair Corralation between KB Financial and IL Science
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.75 times more return on investment than IL Science. However, KB Financial Group is 1.34 times less risky than IL Science. It trades about 0.08 of its potential returns per unit of risk. IL Science Co is currently generating about 0.0 per unit of risk. If you would invest 4,715,468 in KB Financial Group on September 4, 2024 and sell it today you would earn a total of 4,924,532 from holding KB Financial Group or generate 104.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. IL Science Co
Performance |
| Timeline |
| KB Financial Group |
| IL Science |
KB Financial and IL Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and IL Science
The main advantage of trading using opposite KB Financial and IL Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, IL Science 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 IL Science will offset losses from the drop in IL Science's long position.| KB Financial vs. Dongjin Semichem Co | KB Financial vs. AhnLab Inc | KB Financial vs. Posco ICT | KB Financial vs. CJ ENM |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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