Correlation Between KB Financial and CH HS
Can any of the company-specific risk be diversified away by investing in both KB Financial and CH HS 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 CH HS 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 CH HS TRANSMIS, you can compare the effects of market volatilities on KB Financial and CH HS 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 CH HS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and CH HS.
Diversification Opportunities for KB Financial and CH HS
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBIA and BGR is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and CH HS TRANSMIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CH HS TRANSMIS 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 CH HS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CH HS TRANSMIS has no effect on the direction of KB Financial i.e., KB Financial and CH HS go up and down completely randomly.
Pair Corralation between KB Financial and CH HS
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.99 times more return on investment than CH HS. However, KB Financial Group is 1.01 times less risky than CH HS. It trades about 0.18 of its potential returns per unit of risk. CH HS TRANSMIS is currently generating about -0.05 per unit of risk. If you would invest 4,660 in KB Financial Group on January 30, 2024 and sell it today you would earn a total of 640.00 from holding KB Financial Group or generate 13.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KB Financial Group vs. CH HS TRANSMIS
Performance |
Timeline |
KB Financial Group |
CH HS TRANSMIS |
KB Financial and CH HS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and CH HS
The main advantage of trading using opposite KB Financial and CH HS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, CH HS 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 CH HS will offset losses from the drop in CH HS's long position.The idea behind KB Financial Group and CH HS TRANSMIS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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