Correlation Between KB Financial and Alton Sports
Can any of the company-specific risk be diversified away by investing in both KB Financial and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on KB Financial and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Alton Sports.
Diversification Opportunities for KB Financial and Alton Sports
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and Alton is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of KB Financial i.e., KB Financial and Alton Sports go up and down completely randomly.
Pair Corralation between KB Financial and Alton Sports
Assuming the 90 days trading horizon KB Financial Group is expected to generate 2.82 times more return on investment than Alton Sports. However, KB Financial is 2.82 times more volatile than Alton Sports CoLtd. It trades about 0.1 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.2 per unit of risk. If you would invest 8,248,444 in KB Financial Group on September 6, 2024 and sell it today you would earn a total of 1,291,556 from holding KB Financial Group or generate 15.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KB Financial Group vs. Alton Sports CoLtd
Performance |
Timeline |
KB Financial Group |
Alton Sports CoLtd |
KB Financial and Alton Sports Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and Alton Sports
The main advantage of trading using opposite KB Financial and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.KB Financial vs. Dongjin Semichem Co | KB Financial vs. AhnLab Inc | KB Financial vs. Posco ICT | KB Financial vs. CJ ENM |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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