Correlation Between Zhihu and KB Financial
Can any of the company-specific risk be diversified away by investing in both Zhihu 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 Zhihu and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhihu Inc ADR and KB Financial Group, you can compare the effects of market volatilities on Zhihu 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 Zhihu with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and KB Financial.
Diversification Opportunities for Zhihu and KB Financial
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhihu and KB Financial is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR 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 Zhihu 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 Zhihu Inc ADR 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 Zhihu i.e., Zhihu and KB Financial go up and down completely randomly.
Pair Corralation between Zhihu and KB Financial
Allowing for the 90-day total investment horizon Zhihu is expected to generate 1.75 times less return on investment than KB Financial. In addition to that, Zhihu is 1.13 times more volatile than KB Financial Group. It trades about 0.2 of its total potential returns per unit of risk. KB Financial Group is currently generating about 0.4 per unit of volatility. If you would invest 4,641 in KB Financial Group on April 8, 2025 and sell it today you would earn a total of 3,704 from holding KB Financial Group or generate 79.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. KB Financial Group
Performance |
| Timeline |
| Zhihu Inc ADR |
| KB Financial Group |
Zhihu and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and KB Financial
The main advantage of trading using opposite Zhihu and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu 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.| Zhihu vs. SD Standard Drilling | Zhihu vs. WT Offshore | Zhihu vs. EastGroup Properties | Zhihu vs. Drilling Tools International |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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