Correlation Between KB Financial and Alternative Investment
Can any of the company-specific risk be diversified away by investing in both KB Financial and Alternative Investment 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 Alternative Investment 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 Alternative Investment, you can compare the effects of market volatilities on KB Financial and Alternative Investment 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 Alternative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Alternative Investment.
Diversification Opportunities for KB Financial and Alternative Investment
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Alternative is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Alternative Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Investment 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 Alternative Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Investment has no effect on the direction of KB Financial i.e., KB Financial and Alternative Investment go up and down completely randomly.
Pair Corralation between KB Financial and Alternative Investment
Allowing for the 90-day total investment horizon KB Financial is expected to generate 12.47 times less return on investment than Alternative Investment. But when comparing it to its historical volatility, KB Financial Group is 21.46 times less risky than Alternative Investment. It trades about 0.08 of its potential returns per unit of risk. Alternative Investment is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Alternative Investment on August 30, 2024 and sell it today you would earn a total of 187.99 from holding Alternative Investment or generate 1879900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
KB Financial Group vs. Alternative Investment
Performance |
| Timeline |
| KB Financial Group |
| Alternative Investment |
KB Financial and Alternative Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Alternative Investment
The main advantage of trading using opposite KB Financial and Alternative Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Alternative Investment 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 Alternative Investment will offset losses from the drop in Alternative Investment's long position.| KB Financial vs. JPMorgan Chase Co | KB Financial vs. Citigroup | KB Financial vs. Wells Fargo | KB Financial vs. Toronto Dominion Bank |
| Alternative Investment vs. BBB Foods | Alternative Investment vs. Eldorado Gold Corp | Alternative Investment vs. Tradeweb Markets | Alternative Investment vs. Enersys |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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