Correlation Between KB Financial and FORTEC Elektronik
Can any of the company-specific risk be diversified away by investing in both KB Financial and FORTEC Elektronik 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 FORTEC Elektronik 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 FORTEC Elektronik AG, you can compare the effects of market volatilities on KB Financial and FORTEC Elektronik 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 FORTEC Elektronik. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and FORTEC Elektronik.
Diversification Opportunities for KB Financial and FORTEC Elektronik
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBIA and FORTEC is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and FORTEC Elektronik AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORTEC Elektronik 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 FORTEC Elektronik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORTEC Elektronik has no effect on the direction of KB Financial i.e., KB Financial and FORTEC Elektronik go up and down completely randomly.
Pair Corralation between KB Financial and FORTEC Elektronik
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.7 times more return on investment than FORTEC Elektronik. However, KB Financial Group is 1.43 times less risky than FORTEC Elektronik. It trades about 0.19 of its potential returns per unit of risk. FORTEC Elektronik AG is currently generating about 0.08 per unit of risk. If you would invest 5,500 in KB Financial Group on October 15, 2024 and sell it today you would earn a total of 250.00 from holding KB Financial Group or generate 4.55% 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. FORTEC Elektronik AG
Performance |
| Timeline |
| KB Financial Group |
| FORTEC Elektronik |
KB Financial and FORTEC Elektronik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and FORTEC Elektronik
The main advantage of trading using opposite KB Financial and FORTEC Elektronik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, FORTEC Elektronik 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 FORTEC Elektronik will offset losses from the drop in FORTEC Elektronik's long position.| KB Financial vs. ITALIAN WINE BRANDS | KB Financial vs. Transport International Holdings | KB Financial vs. Corporate Office Properties | KB Financial vs. AIR PRODCHEMICALS |
| FORTEC Elektronik vs. Delta Electronics Public | FORTEC Elektronik vs. China Communications Services | FORTEC Elektronik vs. LPKF Laser Electronics | FORTEC Elektronik vs. Singapore Telecommunications Limited |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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