Correlation Between Han Kook and KB Financial

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

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

Diversification Opportunities for Han Kook and KB Financial

-0.05

Correlation Coefficient

Han Kook  KB Financial

Good diversification

The 3 months correlation between Han and 105560 is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Han Kook Capital 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 Han Kook 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 Han Kook Capital 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 Han Kook i.e., Han Kook and KB Financial go up and down completely randomly.

Pair Corralation between Han Kook and KB Financial

Assuming the 90 days trading horizon Han Kook Capital is expected to generate 0.43 times more return on investment than KB Financial. However, Han Kook Capital is 2.31 times less risky than KB Financial. It trades about 0.13 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.13 per unit of risk. If you would invest  52,055  in Han Kook Capital on December 2, 2024 and sell it today you would earn a total of  4,145  from holding Han Kook Capital or generate 7.96% return on investment over 90 days.

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

Han Kook Capital  vs.  KB Financial Group

Han Kook Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Han Kook Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Han Kook may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 Han Kook and KB Financial

The main advantage of trading using opposite Han Kook and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Han Kook 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 Han Kook Capital 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.