Correlation Between KB Financial and Samsung Publishing

Can any of the company-specific risk be diversified away by investing in both KB Financial and Samsung Publishing 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 Samsung Publishing 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 Samsung Publishing Co, you can compare the effects of market volatilities on KB Financial and Samsung Publishing 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 Samsung Publishing. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Samsung Publishing.

Diversification Opportunities for KB Financial and Samsung Publishing

-0.39

Correlation Coefficient

KB Financial  Samsung Publishing

Very good diversification

The 3 months correlation between 105560 and Samsung is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Samsung Publishing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Publishing 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 Samsung Publishing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Publishing has no effect on the direction of KB Financial i.e., KB Financial and Samsung Publishing go up and down completely randomly.

Pair Corralation between KB Financial and Samsung Publishing

Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.82 times more return on investment than Samsung Publishing. However, KB Financial Group is 1.22 times less risky than Samsung Publishing. It trades about 0.04 of its potential returns per unit of risk. Samsung Publishing Co is currently generating about -0.03 per unit of risk. If you would invest  7,783,440  in KB Financial Group on September 28, 2024 and sell it today you would earn a total of  716,560  from holding KB Financial Group or generate 9.21% return on investment over 90 days.

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

KB Financial Group  vs.  Samsung Publishing Co

KB Financial Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 3 (%) 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.

Samsung Publishing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsung Publishing Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samsung Publishing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KB Financial and Samsung Publishing

The main advantage of trading using opposite KB Financial and Samsung Publishing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Samsung Publishing 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 Samsung Publishing will offset losses from the drop in Samsung Publishing's long position.

The idea behind KB Financial Group and Samsung Publishing Co 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.