Correlation Between Banco De and KB Financial
Can any of the company-specific risk be diversified away by investing in both Banco De 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 Banco De and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco De Chile and KB Financial Group, you can compare the effects of market volatilities on Banco De 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 Banco De with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco De and KB Financial.
Diversification Opportunities for Banco De and KB Financial
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Banco and KB Financial is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Banco De Chile 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 Banco De 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 Banco De Chile 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 Banco De i.e., Banco De and KB Financial go up and down completely randomly.
Pair Corralation between Banco De and KB Financial
Considering the 90-day investment horizon Banco De is expected to generate 14.45 times less return on investment than KB Financial. But when comparing it to its historical volatility, Banco De Chile is 1.92 times less risky than KB Financial. It trades about 0.01 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,421 in KB Financial Group on September 3, 2024 and sell it today you would earn a total of 1,472 from holding KB Financial Group or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco De Chile vs. KB Financial Group
Performance |
| Timeline |
| Banco De Chile |
| KB Financial Group |
Banco De and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco De and KB Financial
The main advantage of trading using opposite Banco De and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco De 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.| Banco De vs. Banco Santander Brasil | Banco De vs. CrossFirst Bankshares | Banco De vs. Banco Bradesco SA | Banco De vs. CF Bankshares |
| KB Financial vs. Shinhan Financial Group | KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Positions Ratings 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 | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |