Correlation Between Ssangyong Information and KB Financial

Can any of the company-specific risk be diversified away by investing in both Ssangyong Information 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 Ssangyong Information and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ssangyong Information Communication and KB Financial Group, you can compare the effects of market volatilities on Ssangyong Information 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 Ssangyong Information with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ssangyong Information and KB Financial.

Diversification Opportunities for Ssangyong Information and KB Financial

-0.33

Correlation Coefficient

Ssangyong Information  KB Financial

Very good diversification

The 3 months correlation between Ssangyong and 105560 is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ssangyong Information Communic 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 Ssangyong Information 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 Ssangyong Information Communication 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 Ssangyong Information i.e., Ssangyong Information and KB Financial go up and down completely randomly.

Pair Corralation between Ssangyong Information and KB Financial

Assuming the 90 days trading horizon Ssangyong Information Communication is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Ssangyong Information Communication is 1.05 times less risky than KB Financial. The stock trades about 0.0 of its potential returns per unit of risk. The KB Financial Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,568,090  in KB Financial Group on December 2, 2024 and sell it today you would earn a total of  3,261,910  from holding KB Financial Group or generate 71.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ssangyong Information Communic  vs.  KB Financial Group

Ssangyong Information

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ssangyong Information Communication are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ssangyong Information sustained solid returns over the last few months and may actually be approaching a breakup point.

KB Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days KB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ssangyong Information and KB Financial

The main advantage of trading using opposite Ssangyong Information and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ssangyong Information 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.

The idea behind Ssangyong Information Communication and KB Financial Group 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.