Correlation Between Yura Tech and KB Financial

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

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

Diversification Opportunities for Yura Tech and KB Financial

-0.74

Correlation Coefficient

Yura Tech  KB Financial

Pay attention - limited upside

The 3 months correlation between Yura and 105560 is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co 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 Yura Tech 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 Yura Tech Co 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 Yura Tech i.e., Yura Tech and KB Financial go up and down completely randomly.

Pair Corralation between Yura Tech and KB Financial

Assuming the 90 days trading horizon Yura Tech is expected to generate 1.77 times less return on investment than KB Financial. In addition to that, Yura Tech is 1.38 times more volatile than KB Financial Group. It trades about 0.02 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.06 per unit of volatility. If you would invest  5,246,483  in KB Financial Group on October 10, 2024 and sell it today you would earn a total of  3,313,517  from holding KB Financial Group or generate 63.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Yura Tech Co  vs.  KB Financial Group

Yura Tech

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yura Tech Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yura Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

KB Financial Group

Risk-Adjusted Performance

0 of 100

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 somewhat strong basic indicators, KB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yura Tech and KB Financial

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

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.