Correlation Between KB Financial and TELE2 B
Can any of the company-specific risk be diversified away by investing in both KB Financial and TELE2 B 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 TELE2 B 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 TELE2 B , you can compare the effects of market volatilities on KB Financial and TELE2 B 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 TELE2 B. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and TELE2 B.
Diversification Opportunities for KB Financial and TELE2 B
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KBIA and TELE2 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 B 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 TELE2 B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 B has no effect on the direction of KB Financial i.e., KB Financial and TELE2 B go up and down completely randomly.
Pair Corralation between KB Financial and TELE2 B
Assuming the 90 days trading horizon KB Financial is expected to generate 5.59 times less return on investment than TELE2 B. But when comparing it to its historical volatility, KB Financial Group is 2.45 times less risky than TELE2 B. It trades about 0.04 of its potential returns per unit of risk. TELE2 B is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 114.00 in TELE2 B on September 19, 2024 and sell it today you would earn a total of 863.00 from holding TELE2 B or generate 757.02% 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. TELE2 B
Performance |
| Timeline |
| KB Financial Group |
| TELE2 B |
KB Financial and TELE2 B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and TELE2 B
The main advantage of trading using opposite KB Financial and TELE2 B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, TELE2 B 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 TELE2 B will offset losses from the drop in TELE2 B's long position.| KB Financial vs. Broadcom | KB Financial vs. Transportadora de Gas | KB Financial vs. Q2M Managementberatung AG | KB Financial vs. TRAINLINE PLC LS |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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