Correlation Between KB Financial and Samsung Special
Can any of the company-specific risk be diversified away by investing in both KB Financial and Samsung Special 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 Samsung Special 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 Samsung Special Purpose, you can compare the effects of market volatilities on KB Financial and Samsung Special 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 Samsung Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Samsung Special.
Diversification Opportunities for KB Financial and Samsung Special
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 105560 and Samsung is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Samsung Special Purpose in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Special Purpose 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 Samsung Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Special Purpose has no effect on the direction of KB Financial i.e., KB Financial and Samsung Special go up and down completely randomly.
Pair Corralation between KB Financial and Samsung Special
Assuming the 90 days trading horizon KB Financial Group is expected to generate 2.3 times more return on investment than Samsung Special. However, KB Financial is 2.3 times more volatile than Samsung Special Purpose. It trades about 0.08 of its potential returns per unit of risk. Samsung Special Purpose is currently generating about -0.05 per unit of risk. If you would invest 4,853,564 in KB Financial Group on September 12, 2024 and sell it today you would earn a total of 3,476,436 from holding KB Financial Group or generate 71.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Samsung Special Purpose
Performance |
| Timeline |
| KB Financial Group |
| Samsung Special Purpose |
KB Financial and Samsung Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Samsung Special
The main advantage of trading using opposite KB Financial and Samsung Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Samsung Special 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 Samsung Special will offset losses from the drop in Samsung Special's long position.| KB Financial vs. Shinhan Financial Group | KB Financial vs. Hana Financial | KB Financial vs. Woori Financial Group | KB Financial vs. Samsung Electronics Co |
| Samsung Special vs. Daewon Media Co | Samsung Special vs. DC Media Co | Samsung Special vs. Next Entertainment World | Samsung Special vs. Daejung Chemicals Metals |
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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