Correlation Between KB Financial and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both KB Financial and Doosan Fuel 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 Doosan Fuel 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 Doosan Fuel Cell, you can compare the effects of market volatilities on KB Financial and Doosan Fuel 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 Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Doosan Fuel.
Diversification Opportunities for KB Financial and Doosan Fuel
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Doosan is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Doosan Fuel Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Fuel Cell 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 Doosan Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Fuel Cell has no effect on the direction of KB Financial i.e., KB Financial and Doosan Fuel go up and down completely randomly.
Pair Corralation between KB Financial and Doosan Fuel
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.75 times more return on investment than Doosan Fuel. However, KB Financial Group is 1.33 times less risky than Doosan Fuel. It trades about 0.09 of its potential returns per unit of risk. Doosan Fuel Cell 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Doosan Fuel Cell
Performance |
| Timeline |
| KB Financial Group |
| Doosan Fuel Cell |
KB Financial and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Doosan Fuel
The main advantage of trading using opposite KB Financial and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Doosan Fuel 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 Doosan Fuel will offset losses from the drop in Doosan Fuel'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 |
| Doosan Fuel vs. LS Electric | Doosan Fuel vs. KB Financial Group | Doosan Fuel vs. Dongbang Ship Machinery |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |