Correlation Between Transportadora and KB Financial
Can any of the company-specific risk be diversified away by investing in both Transportadora 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 Transportadora and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and KB Financial Group, you can compare the effects of market volatilities on Transportadora 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 Transportadora with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and KB Financial.
Diversification Opportunities for Transportadora and KB Financial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Transportadora and KBIA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas 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 Transportadora 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 Transportadora de Gas 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 Transportadora i.e., Transportadora and KB Financial go up and down completely randomly.
Pair Corralation between Transportadora and KB Financial
Assuming the 90 days trading horizon Transportadora de Gas is expected to generate 1.93 times more return on investment than KB Financial. However, Transportadora is 1.93 times more volatile than KB Financial Group. It trades about -0.1 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.29 per unit of risk. If you would invest 2,420 in Transportadora de Gas on December 10, 2024 and sell it today you would lose (220.00) from holding Transportadora de Gas or give up 9.09% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Transportadora de Gas vs. KB Financial Group
Performance |
Timeline |
Transportadora de Gas |
KB Financial Group |
Transportadora and KB Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Transportadora and KB Financial
The main advantage of trading using opposite Transportadora and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora 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.Transportadora vs. Information Services International Dentsu | Transportadora vs. National Retail Properties | Transportadora vs. Automatic Data Processing | Transportadora vs. JIAHUA STORES |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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