Correlation Between Fine Besteel and KB Financial
Can any of the company-specific risk be diversified away by investing in both Fine Besteel 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 Fine Besteel and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fine Besteel Co and KB Financial Group, you can compare the effects of market volatilities on Fine Besteel 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 Fine Besteel with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fine Besteel and KB Financial.
Diversification Opportunities for Fine Besteel and KB Financial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fine and 105560 is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fine Besteel 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 Fine Besteel 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 Fine Besteel 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 Fine Besteel i.e., Fine Besteel and KB Financial go up and down completely randomly.
Pair Corralation between Fine Besteel and KB Financial
Assuming the 90 days trading horizon Fine Besteel Co is expected to generate 2.6 times more return on investment than KB Financial. However, Fine Besteel is 2.6 times more volatile than KB Financial Group. It trades about 0.27 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.44 per unit of risk. If you would invest 92,600 in Fine Besteel Co on November 4, 2024 and sell it today you would earn a total of 13,900 from holding Fine Besteel Co or generate 15.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fine Besteel Co vs. KB Financial Group
Performance |
| Timeline |
| Fine Besteel |
| KB Financial Group |
Fine Besteel and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fine Besteel and KB Financial
The main advantage of trading using opposite Fine Besteel and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fine Besteel 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.| Fine Besteel vs. Lake Materials Co | Fine Besteel vs. Kisan Telecom Co | Fine Besteel vs. SK Telecom Co | Fine Besteel vs. RF Materials Co |
| KB Financial vs. Netmarble Games Corp | KB Financial vs. Korean Reinsurance Co | KB Financial vs. Dongbang Transport Logistics | KB Financial vs. LG Chemicals |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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