Correlation Between KB Financial and Americann
Can any of the company-specific risk be diversified away by investing in both KB Financial and Americann 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 Americann 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 Americann, you can compare the effects of market volatilities on KB Financial and Americann 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 Americann. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Americann.
Diversification Opportunities for KB Financial and Americann
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and Americann is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Americann in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Americann 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 Americann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Americann has no effect on the direction of KB Financial i.e., KB Financial and Americann go up and down completely randomly.
Pair Corralation between KB Financial and Americann
Allowing for the 90-day total investment horizon KB Financial is expected to generate 801.17 times less return on investment than Americann. But when comparing it to its historical volatility, KB Financial Group is 24.22 times less risky than Americann. It trades about 0.0 of its potential returns per unit of risk. Americann is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3.30 in Americann on December 31, 2024 and sell it today you would lose (0.10) from holding Americann or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
KB Financial Group vs. Americann
Performance |
| Timeline |
| KB Financial Group |
| Americann |
KB Financial and Americann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Americann
The main advantage of trading using opposite KB Financial and Americann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Americann 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 Americann will offset losses from the drop in Americann's long position.| KB Financial vs. Shinhan Financial Group | ||
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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