Correlation Between Citigroup and KB Financial
Can any of the company-specific risk be diversified away by investing in both Citigroup 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 Citigroup and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and KB Financial Group, you can compare the effects of market volatilities on Citigroup 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 Citigroup with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and KB Financial.
Diversification Opportunities for Citigroup and KB Financial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Citigroup and KB Financial is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup 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 Citigroup 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 Citigroup 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 Citigroup i.e., Citigroup and KB Financial go up and down completely randomly.
Pair Corralation between Citigroup and KB Financial
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.03 times more return on investment than KB Financial. However, Citigroup is 1.03 times more volatile than KB Financial Group. It trades about -0.08 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.19 per unit of risk. If you would invest 8,051 in Citigroup on November 28, 2024 and sell it today you would lose (237.00) from holding Citigroup or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Citigroup vs. KB Financial Group
Performance |
| Timeline |
| Citigroup |
| KB Financial Group |
Citigroup and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and KB Financial
The main advantage of trading using opposite Citigroup and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup 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.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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