Correlation Between KB Financial and ENF Technology

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

Diversification Opportunities for KB Financial and ENF Technology

-0.33

Correlation Coefficient

KB Financial  ENF Technology

Very good diversification

The 3 months correlation between 105560 and ENF is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF Technology 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 ENF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENF Technology has no effect on the direction of KB Financial i.e., KB Financial and ENF Technology go up and down completely randomly.

Pair Corralation between KB Financial and ENF Technology

Assuming the 90 days trading horizon KB Financial is expected to generate 9.99 times less return on investment than ENF Technology. But when comparing it to its historical volatility, KB Financial Group is 2.16 times less risky than ENF Technology. It trades about 0.05 of its potential returns per unit of risk. ENF Technology Co is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,510,423  in ENF Technology Co on October 8, 2024 and sell it today you would earn a total of  209,577  from holding ENF Technology Co or generate 13.88% 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.  ENF Technology Co

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.

ENF Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENF Technology Co 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KB Financial and ENF Technology

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

The idea behind KB Financial Group and ENF Technology 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.