Correlation Between KB Financial and Banco Macro
Can any of the company-specific risk be diversified away by investing in both KB Financial and Banco Macro 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 Banco Macro 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 Banco Macro SA, you can compare the effects of market volatilities on KB Financial and Banco Macro 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 Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Banco Macro.
Diversification Opportunities for KB Financial and Banco Macro
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and Banco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA 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 Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of KB Financial i.e., KB Financial and Banco Macro go up and down completely randomly.
Pair Corralation between KB Financial and Banco Macro
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the Banco Macro. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.96 times less risky than Banco Macro. The stock trades about -0.07 of its potential returns per unit of risk. The Banco Macro SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,911 in Banco Macro SA on October 26, 2024 and sell it today you would earn a total of 2,965 from holding Banco Macro SA or generate 37.48% 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. Banco Macro SA
Performance |
| Timeline |
| KB Financial Group |
| Banco Macro SA |
KB Financial and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Banco Macro
The main advantage of trading using opposite KB Financial and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro'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 |
| Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. BBVA Banco Frances | Banco Macro vs. Banco Bradesco SA | Banco Macro vs. Itau Unibanco Banco |
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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