Correlation Between JPMorgan Chase and KB Financial
Can any of the company-specific risk be diversified away by investing in both JPMorgan Chase 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 JPMorgan Chase and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JPMorgan Chase Co and KB Financial Group, you can compare the effects of market volatilities on JPMorgan Chase 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 JPMorgan Chase with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of JPMorgan Chase and KB Financial.
Diversification Opportunities for JPMorgan Chase and KB Financial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JPMorgan and KB Financial is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding JPMorgan Chase Co 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 JPMorgan Chase 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 JPMorgan Chase Co 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 JPMorgan Chase i.e., JPMorgan Chase and KB Financial go up and down completely randomly.
Pair Corralation between JPMorgan Chase and KB Financial
Considering the 90-day investment horizon JPMorgan Chase is expected to generate 1.17 times less return on investment than KB Financial. But when comparing it to its historical volatility, JPMorgan Chase Co is 1.65 times less risky than KB Financial. It trades about 0.13 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,544 in KB Financial Group on September 2, 2024 and sell it today you would earn a total of 3,349 from holding KB Financial Group or generate 94.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JPMorgan Chase Co vs. KB Financial Group
Performance |
| Timeline |
| JPMorgan Chase |
| KB Financial Group |
JPMorgan Chase and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JPMorgan Chase and KB Financial
The main advantage of trading using opposite JPMorgan Chase and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JPMorgan Chase 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.| JPMorgan Chase vs. Citigroup | JPMorgan Chase vs. Nu Holdings | JPMorgan Chase vs. HSBC Holdings PLC | JPMorgan Chase vs. Bank of Montreal |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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