Correlation Between Dongil Metal and KB Financial
Can any of the company-specific risk be diversified away by investing in both Dongil Metal and KB Financial 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 Dongil Metal and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Metal Co and KB Financial Group, you can compare the effects of market volatilities on Dongil Metal and KB Financial 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 Dongil Metal with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and KB Financial.
Diversification Opportunities for Dongil Metal and KB Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dongil and 105560 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal Co and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group and Dongil Metal 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 Dongil Metal Co are associated (or correlated) with KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of Dongil Metal i.e., Dongil Metal and KB Financial go up and down completely randomly.
Pair Corralation between Dongil Metal and KB Financial
Assuming the 90 days trading horizon Dongil Metal Co is expected to generate 0.41 times more return on investment than KB Financial. However, Dongil Metal Co is 2.43 times less risky than KB Financial. It trades about -0.13 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.06 per unit of risk. If you would invest 840,000 in Dongil Metal Co on September 15, 2024 and sell it today you would lose (33,000) from holding Dongil Metal Co or give up 3.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Metal Co vs. KB Financial Group
Performance |
| Timeline |
| Dongil Metal |
| KB Financial Group |
Dongil Metal and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Metal and KB Financial
The main advantage of trading using opposite Dongil Metal and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal position performs unexpectedly, KB Financial 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 KB Financial will offset losses from the drop in KB Financial's long position.| Dongil Metal vs. LG Chemicals | Dongil Metal vs. POSCO Holdings | Dongil Metal vs. Hanwha Solutions | Dongil Metal vs. Lotte Chemical Corp |
| KB Financial vs. Dongil Metal Co | KB Financial vs. Shinsegae Engineering Construction | KB Financial vs. Seoam Machinery Industry | KB Financial vs. Kyeryong Construction Industrial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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