Correlation Between Benchmark Electronics and KB Financial
Can any of the company-specific risk be diversified away by investing in both Benchmark Electronics 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 Benchmark Electronics and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Electronics and KB Financial Group, you can compare the effects of market volatilities on Benchmark Electronics 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 Benchmark Electronics with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Electronics and KB Financial.
Diversification Opportunities for Benchmark Electronics and KB Financial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Benchmark and KBIA is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics i.e., Benchmark Electronics and KB Financial go up and down completely randomly.
Pair Corralation between Benchmark Electronics and KB Financial
Assuming the 90 days horizon Benchmark Electronics is expected to generate 1.3 times more return on investment than KB Financial. However, Benchmark Electronics is 1.3 times more volatile than KB Financial Group. It trades about 0.16 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.08 per unit of risk. If you would invest 4,160 in Benchmark Electronics on August 30, 2024 and sell it today you would earn a total of 480.00 from holding Benchmark Electronics or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Benchmark Electronics vs. KB Financial Group
Performance |
| Timeline |
| Benchmark Electronics |
| KB Financial Group |
Benchmark Electronics and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Electronics and KB Financial
The main advantage of trading using opposite Benchmark Electronics and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics 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.| Benchmark Electronics vs. Meiko Electronics Co | Benchmark Electronics vs. Superior Plus Corp | Benchmark Electronics vs. NMI Holdings | Benchmark Electronics vs. SIVERS SEMICONDUCTORS AB |
| KB Financial vs. Playa Hotels Resorts | KB Financial vs. CDL INVESTMENT | KB Financial vs. ECHO INVESTMENT ZY | KB Financial vs. Ming Le Sports |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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