Correlation Between KB Financial and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both KB Financial and Fast Retailing 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 Fast Retailing 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 Fast Retailing Co, you can compare the effects of market volatilities on KB Financial and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Fast Retailing.
Diversification Opportunities for KB Financial and Fast Retailing
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KBIA and Fast is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of KB Financial i.e., KB Financial and Fast Retailing go up and down completely randomly.
Pair Corralation between KB Financial and Fast Retailing
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.07 times more return on investment than Fast Retailing. However, KB Financial is 1.07 times more volatile than Fast Retailing Co. It trades about 0.0 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.12 per unit of risk. If you would invest 5,350 in KB Financial Group on November 30, 2024 and sell it today you would lose (50.00) from holding KB Financial Group or give up 0.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Fast Retailing Co
Performance |
| Timeline |
| KB Financial Group |
| Fast Retailing |
KB Financial and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Fast Retailing
The main advantage of trading using opposite KB Financial and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| KB Financial vs. COPLAND ROAD CAPITAL | KB Financial vs. BROADSTNET LEADL 00025 | KB Financial vs. QUEEN S ROAD | KB Financial vs. Apollo Investment Corp |
| Fast Retailing vs. EITZEN CHEMICALS | Fast Retailing vs. T Mobile | Fast Retailing vs. SOLSTAD OFFSHORE NK | Fast Retailing vs. SIEM OFFSHORE NEW |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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