Correlation Between EHEALTH and KB Financial
Can any of the company-specific risk be diversified away by investing in both EHEALTH and KB Financial 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 EHEALTH and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and KB Financial Group, you can compare the effects of market volatilities on EHEALTH and KB Financial 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 EHEALTH with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and KB Financial.
Diversification Opportunities for EHEALTH and KB Financial
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EHEALTH and KBIA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group and EHEALTH 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 EHEALTH are associated (or correlated) with KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of EHEALTH i.e., EHEALTH and KB Financial go up and down completely randomly.
Pair Corralation between EHEALTH and KB Financial
Assuming the 90 days trading horizon EHEALTH is expected to generate 1.63 times more return on investment than KB Financial. However, EHEALTH is 1.63 times more volatile than KB Financial Group. It trades about 0.07 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.16 per unit of risk. If you would invest 489.00 in EHEALTH on September 12, 2024 and sell it today you would earn a total of 24.00 from holding EHEALTH or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
EHEALTH vs. KB Financial Group
Performance |
| Timeline |
| EHEALTH |
| KB Financial Group |
EHEALTH and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and KB Financial
The main advantage of trading using opposite EHEALTH and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH position performs unexpectedly, KB Financial 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 KB Financial will offset losses from the drop in KB Financial's long position.| EHEALTH vs. PREMIER FOODS | EHEALTH vs. Commonwealth Bank of | EHEALTH vs. ASSOC BR FOODS | EHEALTH vs. Thai Beverage Public |
| KB Financial vs. China Merchants Bank | KB Financial vs. HDFC Bank Limited | KB Financial vs. ICICI Bank Limited | KB Financial vs. PT Bank Central |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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