Correlation Between KB Financial and Globex Mining
Can any of the company-specific risk be diversified away by investing in both KB Financial and Globex 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 Globex 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 Globex Mining Enterprises, you can compare the effects of market volatilities on KB Financial and Globex 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 Globex Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Globex Mining.
Diversification Opportunities for KB Financial and Globex Mining
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBIA and Globex is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of KB Financial i.e., KB Financial and Globex Mining go up and down completely randomly.
Pair Corralation between KB Financial and Globex Mining
Assuming the 90 days trading horizon KB Financial is expected to generate 5.45 times less return on investment than Globex Mining. But when comparing it to its historical volatility, KB Financial Group is 1.5 times less risky than Globex Mining. It trades about 0.16 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about 0.58 of returns per unit of risk over similar time horizon. If you would invest 79.00 in Globex Mining Enterprises on November 5, 2024 and sell it today you would earn a total of 27.00 from holding Globex Mining Enterprises or generate 34.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Globex Mining Enterprises
Performance |
| Timeline |
| KB Financial Group |
| Globex Mining Enterprises |
KB Financial and Globex Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Globex Mining
The main advantage of trading using opposite KB Financial and Globex Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Globex 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 Globex Mining will offset losses from the drop in Globex Mining's long position.| KB Financial vs. CREO MEDICAL GRP | KB Financial vs. TITANIUM TRANSPORTGROUP | KB Financial vs. Chesapeake Utilities | KB Financial vs. Yuexiu Transport Infrastructure |
| Globex Mining vs. PKSHA TECHNOLOGY INC | Globex Mining vs. HELIOS TECHS INC | Globex Mining vs. Agilent Technologies | Globex Mining vs. CLEAN ENERGY FUELS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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