Correlation Between KB Financial and Melexis NV
Can any of the company-specific risk be diversified away by investing in both KB Financial and Melexis NV 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 Melexis NV 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 Melexis NV, you can compare the effects of market volatilities on KB Financial and Melexis NV 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 Melexis NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Melexis NV.
Diversification Opportunities for KB Financial and Melexis NV
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and Melexis is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Melexis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melexis NV 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 Melexis NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melexis NV has no effect on the direction of KB Financial i.e., KB Financial and Melexis NV go up and down completely randomly.
Pair Corralation between KB Financial and Melexis NV
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.77 times more return on investment than Melexis NV. However, KB Financial Group is 1.29 times less risky than Melexis NV. It trades about 0.08 of its potential returns per unit of risk. Melexis NV is currently generating about 0.02 per unit of risk. If you would invest 3,592 in KB Financial Group on August 30, 2024 and sell it today you would earn a total of 3,487 from holding KB Financial Group or generate 97.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Melexis NV
Performance |
| Timeline |
| KB Financial Group |
| Melexis NV |
KB Financial and Melexis NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Melexis NV
The main advantage of trading using opposite KB Financial and Melexis NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Melexis NV 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 Melexis NV will offset losses from the drop in Melexis NV's long position.| KB Financial vs. Shinhan Financial Group | KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads |
| Melexis NV vs. NVIDIA | Melexis NV vs. Intel | Melexis NV vs. Taiwan Semiconductor Manufacturing | Melexis NV vs. Marvell Technology Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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