Correlation Between KB Financial and Neutra Corp
Can any of the company-specific risk be diversified away by investing in both KB Financial and Neutra Corp 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 Neutra Corp 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 Neutra Corp, you can compare the effects of market volatilities on KB Financial and Neutra Corp 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 Neutra Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Neutra Corp.
Diversification Opportunities for KB Financial and Neutra Corp
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Neutra is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Neutra Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neutra Corp 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 Neutra Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neutra Corp has no effect on the direction of KB Financial i.e., KB Financial and Neutra Corp go up and down completely randomly.
Pair Corralation between KB Financial and Neutra Corp
If you would invest 6,524 in KB Financial Group on September 3, 2024 and sell it today you would earn a total of 369.00 from holding KB Financial Group or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Neutra Corp
Performance |
| Timeline |
| KB Financial Group |
| Neutra Corp |
KB Financial and Neutra Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Neutra Corp
The main advantage of trading using opposite KB Financial and Neutra Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Neutra Corp 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 Neutra Corp will offset losses from the drop in Neutra Corp'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 |
| Neutra Corp vs. Pharming Group NV | Neutra Corp vs. Kane Biotech | Neutra Corp vs. Health Sciences Gr | Neutra Corp vs. MedMira |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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