Correlation Between First Financial and KB Financial
Can any of the company-specific risk be diversified away by investing in both First Financial 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 First Financial and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Financial Northwest and KB Financial Group, you can compare the effects of market volatilities on First Financial 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 First Financial with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Financial and KB Financial.
Diversification Opportunities for First Financial and KB Financial
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between First and KB Financial is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding First Financial Northwest 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 First 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 First Financial Northwest 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 First Financial i.e., First Financial and KB Financial go up and down completely randomly.
Pair Corralation between First Financial and KB Financial
Given the investment horizon of 90 days First Financial is expected to generate 10.32 times less return on investment than KB Financial. But when comparing it to its historical volatility, First Financial Northwest is 1.5 times less risky than KB Financial. It trades about 0.02 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,524 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 369.00 from holding KB Financial Group or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Financial Northwest vs. KB Financial Group
Performance |
| Timeline |
| First Financial Northwest |
| KB Financial Group |
First Financial and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Financial and KB Financial
The main advantage of trading using opposite First Financial and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Financial 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.| First Financial vs. Home Federal Bancorp | First Financial vs. First Northwest Bancorp | First Financial vs. First Capital | First Financial vs. Community West Bancshares |
| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |