Correlation Between KB Financial and Charter Communications
Can any of the company-specific risk be diversified away by investing in both KB Financial and Charter Communications 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 KB Financial and Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB Financial Group and Charter Communications, you can compare the effects of market volatilities on KB Financial and Charter Communications 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 KB Financial with a short position of Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Charter Communications.
Diversification Opportunities for KB Financial and Charter Communications
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between K1BF34 and Charter is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications and KB Financial 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 KB Financial Group are associated (or correlated) with Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of KB Financial i.e., KB Financial and Charter Communications go up and down completely randomly.
Pair Corralation between KB Financial and Charter Communications
Assuming the 90 days trading horizon KB Financial is expected to generate 1.51 times less return on investment than Charter Communications. But when comparing it to its historical volatility, KB Financial Group is 1.11 times less risky than Charter Communications. It trades about 0.07 of its potential returns per unit of risk. Charter Communications is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,572 in Charter Communications on October 13, 2024 and sell it today you would earn a total of 952.00 from holding Charter Communications or generate 37.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Charter Communications
Performance |
| Timeline |
| KB Financial Group |
| Charter Communications |
KB Financial and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Charter Communications
The main advantage of trading using opposite KB Financial and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| KB Financial vs. Taiwan Semiconductor Manufacturing | KB Financial vs. Apple Inc | KB Financial vs. Alibaba Group Holding | KB Financial vs. Banco Santander Chile |
| Charter Communications vs. KB Financial Group | Charter Communications vs. Tyson Foods | Charter Communications vs. The Hartford Financial | Charter Communications vs. Nordon Indstrias Metalrgicas |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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