Correlation Between KB Financial and Alimentation Couchen
Can any of the company-specific risk be diversified away by investing in both KB Financial and Alimentation Couchen 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 Alimentation Couchen 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 Alimentation Couchen Tard, you can compare the effects of market volatilities on KB Financial and Alimentation Couchen 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 Alimentation Couchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Alimentation Couchen.
Diversification Opportunities for KB Financial and Alimentation Couchen
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Alimentation is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Alimentation Couchen Tard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimentation Couchen Tard 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 Alimentation Couchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimentation Couchen Tard has no effect on the direction of KB Financial i.e., KB Financial and Alimentation Couchen go up and down completely randomly.
Pair Corralation between KB Financial and Alimentation Couchen
Allowing for the 90-day total investment horizon KB Financial is expected to generate 2.87 times less return on investment than Alimentation Couchen. In addition to that, KB Financial is 1.1 times more volatile than Alimentation Couchen Tard. It trades about 0.06 of its total potential returns per unit of risk. Alimentation Couchen Tard is currently generating about 0.17 per unit of volatility. If you would invest 5,337 in Alimentation Couchen Tard on August 27, 2024 and sell it today you would earn a total of 288.00 from holding Alimentation Couchen Tard or generate 5.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Alimentation Couchen Tard
Performance |
| Timeline |
| KB Financial Group |
| Alimentation Couchen Tard |
KB Financial and Alimentation Couchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Alimentation Couchen
The main advantage of trading using opposite KB Financial and Alimentation Couchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Alimentation Couchen 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 Alimentation Couchen will offset losses from the drop in Alimentation Couchen's long position.| KB Financial vs. Shinhan Financial Group | KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads |
| Alimentation Couchen vs. Burlington Stores | Alimentation Couchen vs. Childrens Place | Alimentation Couchen vs. Buckle Inc | Alimentation Couchen vs. Shoe Carnival |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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