Correlation Between KB Financial and SM WIRTSCHAFTSBER
Can any of the company-specific risk be diversified away by investing in both KB Financial and SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER N, you can compare the effects of market volatilities on KB Financial and SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and SM WIRTSCHAFTSBER.
Diversification Opportunities for KB Financial and SM WIRTSCHAFTSBER
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBIA and SMWN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and SM WIRTSCHAFTSBER N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM WIRTSCHAFTSBER has no effect on the direction of KB Financial i.e., KB Financial and SM WIRTSCHAFTSBER go up and down completely randomly.
Pair Corralation between KB Financial and SM WIRTSCHAFTSBER
Assuming the 90 days trading horizon KB Financial Group is expected to generate 2.67 times more return on investment than SM WIRTSCHAFTSBER. However, KB Financial is 2.67 times more volatile than SM WIRTSCHAFTSBER N. It trades about -0.07 of its potential returns per unit of risk. SM WIRTSCHAFTSBER N is currently generating about -0.23 per unit of risk. If you would invest 6,050 in KB Financial Group on September 13, 2024 and sell it today you would lose (350.00) from holding KB Financial Group or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. SM WIRTSCHAFTSBER N
Performance |
| Timeline |
| KB Financial Group |
| SM WIRTSCHAFTSBER |
KB Financial and SM WIRTSCHAFTSBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and SM WIRTSCHAFTSBER
The main advantage of trading using opposite KB Financial and SM WIRTSCHAFTSBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, SM WIRTSCHAFTSBER 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 SM WIRTSCHAFTSBER will offset losses from the drop in SM WIRTSCHAFTSBER's long position.| KB Financial vs. Elmos Semiconductor SE | KB Financial vs. TRADEGATE | KB Financial vs. CANON MARKETING JP | KB Financial vs. MARKET VECTR RETAIL |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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