Correlation Between ITALIAN WINE and KB Financial
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and KB Financial Group, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and KB Financial.
Diversification Opportunities for ITALIAN WINE and KB Financial
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between ITALIAN and KBIA is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS 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 ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and KB Financial go up and down completely randomly.
Pair Corralation between ITALIAN WINE and KB Financial
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to generate 1.98 times more return on investment than KB Financial. However, ITALIAN WINE is 1.98 times more volatile than KB Financial Group. It trades about 0.14 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.22 per unit of risk. If you would invest 2,230 in ITALIAN WINE BRANDS on October 16, 2024 and sell it today you would earn a total of 130.00 from holding ITALIAN WINE BRANDS or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.75% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. KB Financial Group
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| KB Financial Group |
ITALIAN WINE and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and KB Financial
The main advantage of trading using opposite ITALIAN WINE and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.| ITALIAN WINE vs. CAIRN HOMES EO | ITALIAN WINE vs. Federal Agricultural Mortgage | ITALIAN WINE vs. Haier Smart Home | ITALIAN WINE vs. OFFICE DEPOT |
| KB Financial vs. ITALIAN WINE BRANDS | KB Financial vs. Transport International Holdings | KB Financial vs. Corporate Office Properties | KB Financial vs. AIR PRODCHEMICALS |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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