Correlation Between KakaoBank Corp and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both KakaoBank Corp and Daishin Balance 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 Daishin Balance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KakaoBank Corp and Daishin Balance No8, you can compare the effects of market volatilities on KakaoBank Corp and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of KakaoBank Corp and Daishin Balance.
Diversification Opportunities for KakaoBank Corp and Daishin Balance
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KakaoBank and Daishin is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding KakaoBank Corp and Daishin Balance No8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance No8 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance No8 has no effect on the direction of KakaoBank Corp i.e., KakaoBank Corp and Daishin Balance go up and down completely randomly.
Pair Corralation between KakaoBank Corp and Daishin Balance
Assuming the 90 days trading horizon KakaoBank Corp is expected to generate 0.65 times more return on investment than Daishin Balance. However, KakaoBank Corp is 1.55 times less risky than Daishin Balance. It trades about -0.01 of its potential returns per unit of risk. Daishin Balance No8 is currently generating about -0.07 per unit of risk. If you would invest 2,625,000 in KakaoBank Corp on September 14, 2024 and sell it today you would lose (255,000) from holding KakaoBank Corp or give up 9.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KakaoBank Corp vs. Daishin Balance No8
Performance |
| Timeline |
| KakaoBank Corp |
| Daishin Balance No8 |
KakaoBank Corp and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KakaoBank Corp and Daishin Balance
The main advantage of trading using opposite KakaoBank Corp and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KakaoBank Corp position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance'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 |
| Daishin Balance vs. Sangsin Energy Display | Daishin Balance vs. CJ Seafood Corp | Daishin Balance vs. Korea Air Svc | Daishin Balance vs. Korean Air Lines |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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