Correlation Between KB Financial and Alphabet
Can any of the company-specific risk be diversified away by investing in both KB Financial and Alphabet 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 KB Financial and Alphabet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB Financial Group and Alphabet, you can compare the effects of market volatilities on KB Financial and Alphabet 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 KB Financial with a short position of Alphabet. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Alphabet.
Diversification Opportunities for KB Financial and Alphabet
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between K1BF34 and Alphabet is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Alphabet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphabet and KB 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 KB Financial Group are associated (or correlated) with Alphabet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphabet has no effect on the direction of KB Financial i.e., KB Financial and Alphabet go up and down completely randomly.
Pair Corralation between KB Financial and Alphabet
Assuming the 90 days trading horizon KB Financial is expected to generate 1.35 times less return on investment than Alphabet. In addition to that, KB Financial is 1.35 times more volatile than Alphabet. It trades about 0.06 of its total potential returns per unit of risk. Alphabet is currently generating about 0.1 per unit of volatility. If you would invest 4,280 in Alphabet on October 26, 2024 and sell it today you would earn a total of 5,624 from holding Alphabet or generate 131.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.79% |
| Values | Daily Returns |
KB Financial Group vs. Alphabet
Performance |
| Timeline |
| KB Financial Group |
| Alphabet |
KB Financial and Alphabet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Alphabet
The main advantage of trading using opposite KB Financial and Alphabet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Alphabet 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 Alphabet will offset losses from the drop in Alphabet's long position.| KB Financial vs. BIONTECH SE DRN | KB Financial vs. Palantir Technologies | KB Financial vs. Spotify Technology SA | KB Financial vs. CRISPR Therapeutics AG |
| Alphabet vs. The Trade Desk | Alphabet vs. Guidewire Software, | Alphabet vs. Annaly Capital Management, | Alphabet vs. Charter Communications |
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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