Correlation Between KakaoBank Corp and Incar Financial
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and Incar 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 KakaoBank Corp and Incar Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and Incar Financial Service, you can compare the effects of market volatilities on KakaoBank Corp and Incar 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 KakaoBank Corp with a short position of Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and Incar Financial.
Diversification Opportunities for KakaoBank Corp and Incar Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between KakaoBank and Incar is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service and KakaoBank Corp 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 KakaoBank Corp are associated (or correlated) with Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and Incar Financial go up and down completely randomly.
Pair Corralation between KakaoBank Corp and Incar Financial
Assuming the 90 days trading horizon KakaoBank Corp is expected to under-perform the Incar Financial. But the stock apears to be less risky and, when comparing its historical volatility, KakaoBank Corp is 1.91 times less risky than Incar Financial. The stock trades about 0.0 of its potential returns per unit of risk. The Incar Financial Service is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 817,697 in Incar Financial Service on September 1, 2024 and sell it today you would lose (174,697) from holding Incar Financial Service or give up 21.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.74% |
| Values | Daily Returns |
KakaoBank Corp vs. Incar Financial Service
Performance |
| Timeline |
| KakaoBank Corp |
| Incar Financial Service |
KakaoBank Corp and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and Incar Financial
The main advantage of trading using opposite KakaoBank Corp and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, Incar 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| KakaoBank Corp vs. Shinhan Financial Group | KakaoBank Corp vs. Hana Financial | KakaoBank Corp vs. Woori Financial Group | KakaoBank Corp vs. Industrial Bank |
| Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial vs. Mirae Asset Daewoo | Incar Financial vs. Finebesteel |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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