Correlation Between Wintec and KB Financial
Can any of the company-specific risk be diversified away by investing in both Wintec 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 Wintec and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wintec Co and KB Financial Group, you can compare the effects of market volatilities on Wintec 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 Wintec with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wintec and KB Financial.
Diversification Opportunities for Wintec and KB Financial
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wintec and 105560 is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Wintec 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 Wintec 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 Wintec 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 Wintec i.e., Wintec and KB Financial go up and down completely randomly.
Pair Corralation between Wintec and KB Financial
Assuming the 90 days trading horizon Wintec Co is expected to generate 2.11 times more return on investment than KB Financial. However, Wintec is 2.11 times more volatile than KB Financial Group. It trades about 0.1 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.13 per unit of risk. If you would invest 265,000 in Wintec Co on September 2, 2024 and sell it today you would earn a total of 17,000 from holding Wintec Co or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wintec Co vs. KB Financial Group
Performance |
| Timeline |
| Wintec |
| KB Financial Group |
Wintec and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wintec and KB Financial
The main advantage of trading using opposite Wintec and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wintec 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.| Wintec vs. KB Financial Group | Wintec vs. Busan Industrial Co | Wintec vs. Busan Ind | Wintec vs. Mirae Asset Daewoo |
| KB Financial vs. SS TECH | KB Financial vs. Eagle Veterinary Technology | KB Financial vs. Chin Yang Chemical | KB Financial vs. Shinsung Delta Tech |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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