Correlation Between KB Financial and Torrent Capital
Can any of the company-specific risk be diversified away by investing in both KB Financial and Torrent Capital 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 Torrent Capital 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 Torrent Capital, you can compare the effects of market volatilities on KB Financial and Torrent Capital 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 Torrent Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Torrent Capital.
Diversification Opportunities for KB Financial and Torrent Capital
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Torrent is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Torrent Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrent Capital 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 Torrent Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrent Capital has no effect on the direction of KB Financial i.e., KB Financial and Torrent Capital go up and down completely randomly.
Pair Corralation between KB Financial and Torrent Capital
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.72 times more return on investment than Torrent Capital. However, KB Financial Group is 1.38 times less risky than Torrent Capital. It trades about 0.06 of its potential returns per unit of risk. Torrent Capital is currently generating about 0.02 per unit of risk. If you would invest 4,670 in KB Financial Group on November 3, 2024 and sell it today you would earn a total of 1,577 from holding KB Financial Group or generate 33.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
KB Financial Group vs. Torrent Capital
Performance |
| Timeline |
| KB Financial Group |
| Torrent Capital |
KB Financial and Torrent Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Torrent Capital
The main advantage of trading using opposite KB Financial and Torrent Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Torrent Capital 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 Torrent Capital will offset losses from the drop in Torrent Capital'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 |
| Torrent Capital vs. Nuveen Global High | Torrent Capital vs. New America High | Torrent Capital vs. Brookfield Business Corp | Torrent Capital vs. Elysee Development 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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