Correlation Between TRAINLINE PLC and KB Financial
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC 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 TRAINLINE PLC and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and KB Financial Group, you can compare the effects of market volatilities on TRAINLINE PLC 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 TRAINLINE PLC with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and KB Financial.
Diversification Opportunities for TRAINLINE PLC and KB Financial
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TRAINLINE and KBIA is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS 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 TRAINLINE PLC 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 TRAINLINE PLC LS 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 TRAINLINE PLC i.e., TRAINLINE PLC and KB Financial go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and KB Financial
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 1.1 times more return on investment than KB Financial. However, TRAINLINE PLC is 1.1 times more volatile than KB Financial Group. It trades about 0.06 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.07 per unit of risk. If you would invest 297.00 in TRAINLINE PLC LS on September 19, 2024 and sell it today you would earn a total of 218.00 from holding TRAINLINE PLC LS or generate 73.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. KB Financial Group
Performance |
| Timeline |
| TRAINLINE PLC LS |
| KB Financial Group |
TRAINLINE PLC and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and KB Financial
The main advantage of trading using opposite TRAINLINE PLC and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC 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.| TRAINLINE PLC vs. AWILCO DRILLING PLC | TRAINLINE PLC vs. BlueScope Steel Limited | TRAINLINE PLC vs. GFL ENVIRONM | TRAINLINE PLC vs. Major Drilling Group |
| KB Financial vs. Broadcom | KB Financial vs. Transportadora de Gas | KB Financial vs. Q2M Managementberatung AG | KB Financial vs. TRAINLINE PLC LS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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