Correlation Between KG Eco and KB Financial
Can any of the company-specific risk be diversified away by investing in both KG Eco 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 KG Eco and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KG Eco Technology and KB Financial Group, you can compare the effects of market volatilities on KG Eco 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 KG Eco with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and KB Financial.
Diversification Opportunities for KG Eco and KB Financial
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 151860 and 105560 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology 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 KG Eco 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 KG Eco Technology 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 KG Eco i.e., KG Eco and KB Financial go up and down completely randomly.
Pair Corralation between KG Eco and KB Financial
Assuming the 90 days trading horizon KG Eco Technology is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, KG Eco Technology is 1.09 times less risky than KB Financial. The stock trades about -0.14 of its potential returns per unit of risk. The KB Financial Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,899,179 in KB Financial Group on August 25, 2024 and sell it today you would earn a total of 3,940,821 from holding KB Financial Group or generate 66.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KG Eco Technology vs. KB Financial Group
Performance |
| Timeline |
| KG Eco Technology |
| KB Financial Group |
KG Eco and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and KB Financial
The main advantage of trading using opposite KG Eco and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco 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.| KG Eco vs. KB Financial Group | KG Eco vs. Shinhan Financial Group | KG Eco vs. Hana Financial | KG Eco vs. Woori Financial Group |
| KB Financial vs. Sejong Telecom | KB Financial vs. Nice Information Telecommunication | KB Financial vs. Ssangyong Information Communication | KB Financial vs. SCI Information Service |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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