Correlation Between KB Financial and WESTERN DIGITAL
Can any of the company-specific risk be diversified away by investing in both KB Financial and WESTERN DIGITAL 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 WESTERN DIGITAL 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 WESTERN DIGITAL, you can compare the effects of market volatilities on KB Financial and WESTERN DIGITAL 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 WESTERN DIGITAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and WESTERN DIGITAL.
Diversification Opportunities for KB Financial and WESTERN DIGITAL
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KBIA and WESTERN is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and WESTERN DIGITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESTERN DIGITAL 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 WESTERN DIGITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESTERN DIGITAL has no effect on the direction of KB Financial i.e., KB Financial and WESTERN DIGITAL go up and down completely randomly.
Pair Corralation between KB Financial and WESTERN DIGITAL
Assuming the 90 days trading horizon KB Financial is expected to generate 1.79 times less return on investment than WESTERN DIGITAL. In addition to that, KB Financial is 1.01 times more volatile than WESTERN DIGITAL. It trades about 0.09 of its total potential returns per unit of risk. WESTERN DIGITAL is currently generating about 0.17 per unit of volatility. If you would invest 6,193 in WESTERN DIGITAL on August 31, 2024 and sell it today you would earn a total of 596.00 from holding WESTERN DIGITAL or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
KB Financial Group vs. WESTERN DIGITAL
Performance |
| Timeline |
| KB Financial Group |
| WESTERN DIGITAL |
KB Financial and WESTERN DIGITAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and WESTERN DIGITAL
The main advantage of trading using opposite KB Financial and WESTERN DIGITAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, WESTERN DIGITAL 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 WESTERN DIGITAL will offset losses from the drop in WESTERN DIGITAL's long position.| KB Financial vs. China Merchants Bank | KB Financial vs. PT Bank Central | KB Financial vs. State Bank of | KB Financial vs. PT Bank Rakyat |
| WESTERN DIGITAL vs. PRECISION DRILLING P | WESTERN DIGITAL vs. Zijin Mining Group | WESTERN DIGITAL vs. MCEWEN MINING INC | WESTERN DIGITAL vs. ON SEMICONDUCTOR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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