Correlation Between KB Financial and Zencash Investment

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

Diversification Opportunities for KB Financial and Zencash Investment

-0.47

Correlation Coefficient

KB Financial  Zencash Investment

Very good diversification

The 3 months correlation between KB Financial and Zencash is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Zencash Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zencash Investment Trust 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 Zencash Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zencash Investment Trust has no effect on the direction of KB Financial i.e., KB Financial and Zencash Investment go up and down completely randomly.

Pair Corralation between KB Financial and Zencash Investment

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.2 times more return on investment than Zencash Investment. However, KB Financial Group is 4.89 times less risky than Zencash Investment. It trades about -0.01 of its potential returns per unit of risk. Zencash Investment Trust is currently generating about -0.25 per unit of risk. If you would invest  5,848  in KB Financial Group on October 10, 2024 and sell it today you would lose (18.00) from holding KB Financial Group or give up 0.31% of portfolio value over 90 days.

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

KB Financial Group  vs.  Zencash Investment Trust

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 latest fragile performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Zencash Investment Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Zencash Investment Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Zencash Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and Zencash Investment

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

The idea behind KB Financial Group and Zencash Investment Trust 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.