Correlation Between KB Financial and Dongkuk Structures
Can any of the company-specific risk be diversified away by investing in both KB Financial and Dongkuk Structures 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 Dongkuk Structures 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 Dongkuk Structures Construction, you can compare the effects of market volatilities on KB Financial and Dongkuk Structures 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 Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Dongkuk Structures.
Diversification Opportunities for KB Financial and Dongkuk Structures
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Dongkuk is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures 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 Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of KB Financial i.e., KB Financial and Dongkuk Structures go up and down completely randomly.
Pair Corralation between KB Financial and Dongkuk Structures
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.02 times more return on investment than Dongkuk Structures. However, KB Financial is 1.02 times more volatile than Dongkuk Structures Construction. It trades about 0.02 of its potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.09 per unit of risk. If you would invest 8,416,780 in KB Financial Group on September 23, 2024 and sell it today you would earn a total of 163,220 from holding KB Financial Group or generate 1.94% 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. Dongkuk Structures Constructio
Performance |
Timeline |
KB Financial Group |
Dongkuk Structures |
KB Financial and Dongkuk Structures Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and Dongkuk Structures
The main advantage of trading using opposite KB Financial and Dongkuk Structures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Dongkuk Structures 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 Dongkuk Structures will offset losses from the drop in Dongkuk Structures' long position.KB Financial vs. Shinhan Financial Group | KB Financial vs. Hyundai Motor | KB Financial vs. Hyundai Motor Co | KB Financial vs. Hyundai Motor Co |
Dongkuk Structures vs. Busan Industrial Co | Dongkuk Structures vs. Busan Ind | Dongkuk Structures vs. Mirae Asset Daewoo | Dongkuk Structures vs. Shinhan WTI Futures |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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