Correlation Between KB Financial and Grupo Aval
Can any of the company-specific risk be diversified away by investing in both KB Financial and Grupo Aval 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 Grupo Aval 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 Grupo Aval, you can compare the effects of market volatilities on KB Financial and Grupo Aval 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 Grupo Aval. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Grupo Aval.
Diversification Opportunities for KB Financial and Grupo Aval
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KB Financial and Grupo is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Grupo Aval in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aval 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 Grupo Aval. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aval has no effect on the direction of KB Financial i.e., KB Financial and Grupo Aval go up and down completely randomly.
Pair Corralation between KB Financial and Grupo Aval
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.4 times more return on investment than Grupo Aval. However, KB Financial is 1.4 times more volatile than Grupo Aval. It trades about 0.08 of its potential returns per unit of risk. Grupo Aval is currently generating about -0.03 per unit of risk. If you would invest 5,421 in KB Financial Group on September 3, 2024 and sell it today you would earn a total of 1,472 from holding KB Financial Group or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Grupo Aval
Performance |
| Timeline |
| KB Financial Group |
| Grupo Aval |
KB Financial and Grupo Aval Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Grupo Aval
The main advantage of trading using opposite KB Financial and Grupo Aval positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Grupo Aval 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 Grupo Aval will offset losses from the drop in Grupo Aval'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 |
| Grupo Aval vs. Banco De Chile | Grupo Aval vs. Banco Santander Chile | Grupo Aval vs. Credicorp | Grupo Aval vs. Foreign Trade Bank |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |