Correlation Between KB Financial and Xavis
Can any of the company-specific risk be diversified away by investing in both KB Financial and Xavis 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 Xavis 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 Xavis Co, you can compare the effects of market volatilities on KB Financial and Xavis 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 Xavis. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Xavis.
Diversification Opportunities for KB Financial and Xavis
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 105560 and Xavis is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Xavis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xavis 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 Xavis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xavis has no effect on the direction of KB Financial i.e., KB Financial and Xavis go up and down completely randomly.
Pair Corralation between KB Financial and Xavis
Assuming the 90 days trading horizon KB Financial is expected to generate 1.32 times less return on investment than Xavis. But when comparing it to its historical volatility, KB Financial Group is 1.41 times less risky than Xavis. It trades about 0.17 of its potential returns per unit of risk. Xavis Co is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 126,900 in Xavis Co on October 26, 2024 and sell it today you would earn a total of 6,000 from holding Xavis Co or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Xavis Co
Performance |
| Timeline |
| KB Financial Group |
| Xavis |
KB Financial and Xavis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Xavis
The main advantage of trading using opposite KB Financial and Xavis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Xavis 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 Xavis will offset losses from the drop in Xavis' long position.| KB Financial vs. Daejung Chemicals Metals | KB Financial vs. MetaLabs Co | KB Financial vs. Dongbang Transport Logistics | KB Financial vs. Kbi Metal Co |
| Xavis vs. KB Financial Group | Xavis vs. PJ Metal Co | Xavis vs. Lotte Non Life Insurance | Xavis vs. Heungkuk Metaltech CoLtd |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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