Correlation Between KB Financial and Transurban
Can any of the company-specific risk be diversified away by investing in both KB Financial and Transurban 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 Transurban 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 Transurban Group, you can compare the effects of market volatilities on KB Financial and Transurban 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 Transurban. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Transurban.
Diversification Opportunities for KB Financial and Transurban
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBIA and Transurban is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Transurban Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transurban Group 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 Transurban. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transurban Group has no effect on the direction of KB Financial i.e., KB Financial and Transurban go up and down completely randomly.
Pair Corralation between KB Financial and Transurban
Assuming the 90 days trading horizon KB Financial Group is expected to generate 2.02 times more return on investment than Transurban. However, KB Financial is 2.02 times more volatile than Transurban Group. It trades about 0.04 of its potential returns per unit of risk. Transurban Group is currently generating about 0.07 per unit of risk. If you would invest 6,550 in KB Financial Group on August 28, 2024 and sell it today you would earn a total of 100.00 from holding KB Financial Group or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
KB Financial Group vs. Transurban Group
Performance |
| Timeline |
| KB Financial Group |
| Transurban Group |
KB Financial and Transurban Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Transurban
The main advantage of trading using opposite KB Financial and Transurban positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Transurban 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 Transurban will offset losses from the drop in Transurban's long position.| KB Financial vs. GOLD ROAD RES | KB Financial vs. ECHO INVESTMENT ZY | KB Financial vs. Air Transport Services | KB Financial vs. TITANIUM TRANSPORTGROUP |
| Transurban vs. GRUPO CARSO A1 | Transurban vs. EHEALTH | Transurban vs. NORDHEALTH AS NK | Transurban vs. GEAR4MUSIC LS 10 |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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