Correlation Between TRADEGATE and KB Financial

Can any of the company-specific risk be diversified away by investing in both TRADEGATE and KB Financial 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 TRADEGATE and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TRADEGATE and KB Financial Group, you can compare the effects of market volatilities on TRADEGATE and KB Financial 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 TRADEGATE with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and KB Financial.

Diversification Opportunities for TRADEGATE and KB Financial

0.01

Correlation Coefficient

TRADEGATE  KB Financial

Significant diversification

The 3 months correlation between TRADEGATE and KBIA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group and TRADEGATE 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 TRADEGATE are associated (or correlated) with KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of TRADEGATE i.e., TRADEGATE and KB Financial go up and down completely randomly.

Pair Corralation between TRADEGATE and KB Financial

Assuming the 90 days trading horizon TRADEGATE is expected to generate 5.85 times less return on investment than KB Financial. But when comparing it to its historical volatility, TRADEGATE is 11.71 times less risky than KB Financial. It trades about 0.07 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  5,391  in KB Financial Group on September 14, 2024 and sell it today you would earn a total of  209.00  from holding KB Financial Group or generate 3.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

TRADEGATE  vs.  KB Financial Group

TRADEGATE

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TRADEGATE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, TRADEGATE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

KB Financial Group

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, KB Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TRADEGATE and KB Financial

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

The idea behind TRADEGATE and KB Financial Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.