Correlation Between Hyundai and KB Financial
Can any of the company-specific risk be diversified away by investing in both Hyundai 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 Hyundai and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai Motor and KB Financial Group, you can compare the effects of market volatilities on Hyundai 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 Hyundai with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai and KB Financial.
Diversification Opportunities for Hyundai and KB Financial
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyundai and KBIA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai Motor 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 Hyundai 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 Hyundai Motor 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 Hyundai i.e., Hyundai and KB Financial go up and down completely randomly.
Pair Corralation between Hyundai and KB Financial
Assuming the 90 days trading horizon Hyundai is expected to generate 6.61 times less return on investment than KB Financial. But when comparing it to its historical volatility, Hyundai Motor is 1.27 times less risky than KB Financial. It trades about 0.02 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,350 in KB Financial Group on August 31, 2024 and sell it today you would earn a total of 300.00 from holding KB Financial Group or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyundai Motor vs. KB Financial Group
Performance |
| Timeline |
| Hyundai Motor |
| KB Financial Group |
Hyundai and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai and KB Financial
The main advantage of trading using opposite Hyundai and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai 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.| Hyundai vs. CAREER EDUCATION | Hyundai vs. CSSC Offshore Marine | Hyundai vs. Benchmark Electronics | Hyundai vs. TAL Education Group |
| KB Financial vs. China Merchants Bank | KB Financial vs. PT Bank Central | KB Financial vs. State Bank of | KB Financial vs. PT Bank Rakyat |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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