Correlation Between KB Financial and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both KB Financial and AMG Advanced 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 AMG Advanced 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 AMG Advanced Metallurgical, you can compare the effects of market volatilities on KB Financial and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and AMG Advanced.
Diversification Opportunities for KB Financial and AMG Advanced
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and AMG is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of KB Financial i.e., KB Financial and AMG Advanced go up and down completely randomly.
Pair Corralation between KB Financial and AMG Advanced
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.51 times more return on investment than AMG Advanced. However, KB Financial Group is 1.97 times less risky than AMG Advanced. It trades about 0.05 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.05 per unit of risk. If you would invest 3,617 in KB Financial Group on January 9, 2025 and sell it today you would earn a total of 1,546 from holding KB Financial Group or generate 42.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 64.81% |
| Values | Daily Returns |
KB Financial Group vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| KB Financial Group |
| AMG Advanced Metallu |
KB Financial and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and AMG Advanced
The main advantage of trading using opposite KB Financial and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced'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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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