Correlation Between AIR PRODCHEMICALS and KB Financial
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and KB Financial Group, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and KB Financial.
Diversification Opportunities for AIR PRODCHEMICALS and KB Financial
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AIR and KBIA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and KB Financial go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and KB Financial
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 1.44 times more return on investment than KB Financial. However, AIR PRODCHEMICALS is 1.44 times more volatile than KB Financial Group. It trades about 0.48 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.62 per unit of risk. If you would invest 27,861 in AIR PRODCHEMICALS on October 29, 2024 and sell it today you would earn a total of 3,369 from holding AIR PRODCHEMICALS or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. KB Financial Group
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| KB Financial Group |
AIR PRODCHEMICALS and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and KB Financial
The main advantage of trading using opposite AIR PRODCHEMICALS and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Warner Music Group | AIR PRODCHEMICALS vs. THAI BEVERAGE | AIR PRODCHEMICALS vs. UNIVMUSIC GRPADR050 | AIR PRODCHEMICALS vs. PLANT VEDA FOODS |
| KB Financial vs. American Public Education | KB Financial vs. Laureate Education | KB Financial vs. CEOTRONICS | KB Financial vs. Cleanaway Waste Management |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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