Correlation Between KB Financial and Daou Tech
Can any of the company-specific risk be diversified away by investing in both KB Financial and Daou Tech 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 Daou Tech 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 Daou Tech, you can compare the effects of market volatilities on KB Financial and Daou Tech 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 Daou Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Daou Tech.
Diversification Opportunities for KB Financial and Daou Tech
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 105560 and Daou is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Daou Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Tech 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 Daou Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Tech has no effect on the direction of KB Financial i.e., KB Financial and Daou Tech go up and down completely randomly.
Pair Corralation between KB Financial and Daou Tech
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.22 times more return on investment than Daou Tech. However, KB Financial is 1.22 times more volatile than Daou Tech. It trades about 0.06 of its potential returns per unit of risk. Daou Tech is currently generating about 0.01 per unit of risk. If you would invest 4,943,802 in KB Financial Group on September 26, 2024 and sell it today you would earn a total of 3,706,198 from holding KB Financial Group or generate 74.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.79% |
Values | Daily Returns |
KB Financial Group vs. Daou Tech
Performance |
Timeline |
KB Financial Group |
Daou Tech |
KB Financial and Daou Tech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and Daou Tech
The main advantage of trading using opposite KB Financial and Daou Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Daou Tech 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 Daou Tech will offset losses from the drop in Daou Tech's 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 |
Daou Tech vs. KTB Investment Securities | Daou Tech vs. Woori Technology Investment | Daou Tech vs. Samyung Trading Co | Daou Tech vs. Coloray International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Transaction History View history of all your transactions and understand their impact on performance | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |