Correlation Between KB Financial and Neo Cremar
Can any of the company-specific risk be diversified away by investing in both KB Financial and Neo Cremar 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 Neo Cremar 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 Neo Cremar Co, you can compare the effects of market volatilities on KB Financial and Neo Cremar 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 Neo Cremar. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Neo Cremar.
Diversification Opportunities for KB Financial and Neo Cremar
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 105560 and Neo is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Neo Cremar Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Cremar 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 Neo Cremar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Cremar has no effect on the direction of KB Financial i.e., KB Financial and Neo Cremar go up and down completely randomly.
Pair Corralation between KB Financial and Neo Cremar
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.41 times more return on investment than Neo Cremar. However, KB Financial is 1.41 times more volatile than Neo Cremar Co. It trades about 0.09 of its potential returns per unit of risk. Neo Cremar Co is currently generating about 0.01 per unit of risk. If you would invest 6,735,550 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 2,884,450 from holding KB Financial Group or generate 42.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.45% |
| Values | Daily Returns |
KB Financial Group vs. Neo Cremar Co
Performance |
| Timeline |
| KB Financial Group |
| Neo Cremar |
KB Financial and Neo Cremar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Neo Cremar
The main advantage of trading using opposite KB Financial and Neo Cremar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Neo Cremar 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 Neo Cremar will offset losses from the drop in Neo Cremar's long position.| KB Financial vs. Korea Information Engineering | KB Financial vs. SCI Information Service | KB Financial vs. Atinum Investment Co | KB Financial vs. Samyung Trading Co |
| Neo Cremar vs. DataSolution | Neo Cremar vs. InfoBank | Neo Cremar vs. Samsung Life Insurance | Neo Cremar vs. Total Soft Bank |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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