Correlation Between KB Financial and Playfair Mining
Can any of the company-specific risk be diversified away by investing in both KB Financial and Playfair Mining 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 Playfair Mining 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 Playfair Mining, you can compare the effects of market volatilities on KB Financial and Playfair Mining 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 Playfair Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Playfair Mining.
Diversification Opportunities for KB Financial and Playfair Mining
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and Playfair is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Playfair Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playfair Mining 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 Playfair Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playfair Mining has no effect on the direction of KB Financial i.e., KB Financial and Playfair Mining go up and down completely randomly.
Pair Corralation between KB Financial and Playfair Mining
Allowing for the 90-day total investment horizon KB Financial is expected to generate 12.28 times less return on investment than Playfair Mining. But when comparing it to its historical volatility, KB Financial Group is 12.0 times less risky than Playfair Mining. It trades about 0.1 of its potential returns per unit of risk. Playfair Mining is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.70 in Playfair Mining on August 27, 2024 and sell it today you would earn a total of 0.40 from holding Playfair Mining or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Playfair Mining
Performance |
| Timeline |
| KB Financial Group |
| Playfair Mining |
KB Financial and Playfair Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Playfair Mining
The main advantage of trading using opposite KB Financial and Playfair Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Playfair Mining 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 Playfair Mining will offset losses from the drop in Playfair Mining's long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| Playfair Mining vs. Ascendant Resources | Playfair Mining vs. Cantex Mine Development | Playfair Mining vs. Amarc Resources | Playfair Mining vs. Sterling Metals Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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