Correlation Between KB Financial and Data3
Can any of the company-specific risk be diversified away by investing in both KB Financial and Data3 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 Data3 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 Data3 Limited, you can compare the effects of market volatilities on KB Financial and Data3 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 Data3. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Data3.
Diversification Opportunities for KB Financial and Data3
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KBIA and Data3 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Data3 Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data3 Limited 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 Data3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data3 Limited has no effect on the direction of KB Financial i.e., KB Financial and Data3 go up and down completely randomly.
Pair Corralation between KB Financial and Data3
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.09 times more return on investment than Data3. However, KB Financial is 1.09 times more volatile than Data3 Limited. It trades about 0.06 of its potential returns per unit of risk. Data3 Limited is currently generating about -0.04 per unit of risk. If you would invest 5,094 in KB Financial Group on November 3, 2024 and sell it today you would earn a total of 906.00 from holding KB Financial Group or generate 17.79% 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. Data3 Limited
Performance |
| Timeline |
| KB Financial Group |
| Data3 Limited |
KB Financial and Data3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Data3
The main advantage of trading using opposite KB Financial and Data3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Data3 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 Data3 will offset losses from the drop in Data3's long position.| KB Financial vs. Eidesvik Offshore ASA | KB Financial vs. WT OFFSHORE | KB Financial vs. FIREWEED METALS P | KB Financial vs. Transport International Holdings |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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