Correlation Between Foreign Trade and KB Financial
Can any of the company-specific risk be diversified away by investing in both Foreign Trade 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 Foreign Trade and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foreign Trade Bank and KB Financial Group, you can compare the effects of market volatilities on Foreign Trade 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 Foreign Trade with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foreign Trade and KB Financial.
Diversification Opportunities for Foreign Trade and KB Financial
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Foreign and KB Financial is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Foreign Trade Bank 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 Foreign Trade 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 Foreign Trade Bank 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 Foreign Trade i.e., Foreign Trade and KB Financial go up and down completely randomly.
Pair Corralation between Foreign Trade and KB Financial
Considering the 90-day investment horizon Foreign Trade Bank is expected to generate 0.56 times more return on investment than KB Financial. However, Foreign Trade Bank is 1.79 times less risky than KB Financial. It trades about 0.23 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.27 per unit of risk. If you would invest 3,364 in Foreign Trade Bank on September 22, 2024 and sell it today you would earn a total of 242.00 from holding Foreign Trade Bank or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foreign Trade Bank vs. KB Financial Group
Performance |
| Timeline |
| Foreign Trade Bank |
| KB Financial Group |
Foreign Trade and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foreign Trade and KB Financial
The main advantage of trading using opposite Foreign Trade and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foreign Trade 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.| Foreign Trade vs. Consumer Portfolio Services | Foreign Trade vs. Atlanticus Holdings Corp | Foreign Trade vs. Nelnet Inc | Foreign Trade vs. Senmiao Technology |
| KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares | KB Financial vs. Foreign Trade Bank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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