Correlation Between Q Capital and KB Financial

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

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

Diversification Opportunities for Q Capital and KB Financial

-0.35

Correlation Coefficient

Q Capital  KB Financial

Very good diversification

The 3 months correlation between 016600 and 105560 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Q Capital Partners 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 Q Capital 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 Q Capital Partners 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 Q Capital i.e., Q Capital and KB Financial go up and down completely randomly.

Pair Corralation between Q Capital and KB Financial

Assuming the 90 days trading horizon Q Capital Partners is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Q Capital Partners is 1.76 times less risky than KB Financial. The stock trades about -0.23 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  7,733,535  in KB Financial Group on September 12, 2024 and sell it today you would earn a total of  596,465  from holding KB Financial Group or generate 7.71% return on investment over 90 days.

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

Q Capital Partners  vs.  KB Financial Group

Q Capital Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q Capital Partners 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

KB Financial Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KB Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Q Capital and KB Financial

The main advantage of trading using opposite Q Capital and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Q Capital 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 Q Capital Partners 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.