Correlation Between SK Square and KB Financial
Can any of the company-specific risk be diversified away by investing in both SK Square 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 SK Square and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Square Co and KB Financial Group, you can compare the effects of market volatilities on SK Square 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 SK Square with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Square and KB Financial.
Diversification Opportunities for SK Square and KB Financial
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 402340 and 105560 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding SK Square 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 SK Square 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 SK Square 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 SK Square i.e., SK Square and KB Financial go up and down completely randomly.
Pair Corralation between SK Square and KB Financial
Assuming the 90 days trading horizon SK Square Co is expected to under-perform the KB Financial. In addition to that, SK Square is 2.42 times more volatile than KB Financial Group. It trades about -0.12 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.13 per unit of volatility. If you would invest 9,180,000 in KB Financial Group on September 2, 2024 and sell it today you would earn a total of 440,000 from holding KB Financial Group or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Square Co vs. KB Financial Group
Performance |
| Timeline |
| SK Square |
| KB Financial Group |
SK Square and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Square and KB Financial
The main advantage of trading using opposite SK Square and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Square 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.| SK Square vs. KB Financial Group | SK Square vs. Kepco Plant S | SK Square vs. Fine Besteel Co | SK Square vs. JYP Entertainment |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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