Correlation Between KB Financial and CardioComm Solutions
Can any of the company-specific risk be diversified away by investing in both KB Financial and CardioComm Solutions 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 CardioComm Solutions 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 CardioComm Solutions, you can compare the effects of market volatilities on KB Financial and CardioComm Solutions 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 CardioComm Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and CardioComm Solutions.
Diversification Opportunities for KB Financial and CardioComm Solutions
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and CardioComm is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and CardioComm Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CardioComm Solutions 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 CardioComm Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CardioComm Solutions has no effect on the direction of KB Financial i.e., KB Financial and CardioComm Solutions go up and down completely randomly.
Pair Corralation between KB Financial and CardioComm Solutions
Allowing for the 90-day total investment horizon KB Financial is expected to generate 2.34 times less return on investment than CardioComm Solutions. But when comparing it to its historical volatility, KB Financial Group is 3.27 times less risky than CardioComm Solutions. It trades about 0.1 of its potential returns per unit of risk. CardioComm Solutions is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.73 in CardioComm Solutions on August 27, 2024 and sell it today you would earn a total of 0.57 from holding CardioComm Solutions or generate 78.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. CardioComm Solutions
Performance |
| Timeline |
| KB Financial Group |
| CardioComm Solutions |
KB Financial and CardioComm Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and CardioComm Solutions
The main advantage of trading using opposite KB Financial and CardioComm Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, CardioComm Solutions 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 CardioComm Solutions will offset losses from the drop in CardioComm Solutions' long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| CardioComm Solutions vs. Caduceus Software Systems | CardioComm Solutions vs. Cogstate Limited | CardioComm Solutions vs. Cloud DX |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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