Correlation Between NH HOTEL and KB Financial
Can any of the company-specific risk be diversified away by investing in both NH HOTEL 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 NH HOTEL and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and KB Financial Group, you can compare the effects of market volatilities on NH HOTEL 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 NH HOTEL with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and KB Financial.
Diversification Opportunities for NH HOTEL and KB Financial
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NH5 and KBIA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP 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 NH HOTEL 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 NH HOTEL GROUP 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 NH HOTEL i.e., NH HOTEL and KB Financial go up and down completely randomly.
Pair Corralation between NH HOTEL and KB Financial
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 1.45 times more return on investment than KB Financial. However, NH HOTEL is 1.45 times more volatile than KB Financial Group. It trades about 0.05 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.05 per unit of risk. If you would invest 378.00 in NH HOTEL GROUP on November 1, 2024 and sell it today you would earn a total of 251.00 from holding NH HOTEL GROUP or generate 66.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. KB Financial Group
Performance |
| Timeline |
| NH HOTEL GROUP |
| KB Financial Group |
NH HOTEL and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and KB Financial
The main advantage of trading using opposite NH HOTEL and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL 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.| NH HOTEL vs. COMPUTERSHARE | NH HOTEL vs. Nomad Foods | NH HOTEL vs. Entravision Communications | NH HOTEL vs. Charter Communications |
| KB Financial vs. Meli Hotels International | KB Financial vs. Calibre Mining Corp | KB Financial vs. De Grey Mining | KB Financial vs. NH HOTEL GROUP |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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