Correlation Between Jb Financial and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both Jb Financial and Kbi Metal 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 Jb Financial and Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jb Financial and Kbi Metal Co, you can compare the effects of market volatilities on Jb Financial and Kbi Metal 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 Jb Financial with a short position of Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jb Financial and Kbi Metal.
Diversification Opportunities for Jb Financial and Kbi Metal
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 175330 and Kbi is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Jb Financial and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal and Jb 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 Jb Financial are associated (or correlated) with Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of Jb Financial i.e., Jb Financial and Kbi Metal go up and down completely randomly.
Pair Corralation between Jb Financial and Kbi Metal
Assuming the 90 days trading horizon Jb Financial is expected to under-perform the Kbi Metal. But the stock apears to be less risky and, when comparing its historical volatility, Jb Financial is 1.83 times less risky than Kbi Metal. The stock trades about -0.05 of its potential returns per unit of risk. The Kbi Metal Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 193,500 in Kbi Metal Co on December 2, 2024 and sell it today you would earn a total of 10,000 from holding Kbi Metal Co or generate 5.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Jb Financial vs. Kbi Metal Co
Performance |
Timeline |
Jb Financial |
Kbi Metal |
Jb Financial and Kbi Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jb Financial and Kbi Metal
The main advantage of trading using opposite Jb Financial and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jb Financial position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.Jb Financial vs. Lotte Fine Chemical | Jb Financial vs. DAEDUCK ELECTRONICS CoLtd | Jb Financial vs. Vissem Electronics Co | Jb Financial vs. Lotte Rental Co |
Kbi Metal vs. Lotte Non Life Insurance | Kbi Metal vs. InfoBank | Kbi Metal vs. Jeju Bank | Kbi Metal vs. Union Materials Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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