Correlation Between KB Financial and Anheuser-Busch InBev
Can any of the company-specific risk be diversified away by investing in both KB Financial and Anheuser-Busch InBev 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 Anheuser-Busch InBev 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 Anheuser Busch InBev SANV, you can compare the effects of market volatilities on KB Financial and Anheuser-Busch InBev 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 Anheuser-Busch InBev. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Anheuser-Busch InBev.
Diversification Opportunities for KB Financial and Anheuser-Busch InBev
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KB Financial and Anheuser-Busch is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev 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 Anheuser-Busch InBev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch InBev has no effect on the direction of KB Financial i.e., KB Financial and Anheuser-Busch InBev go up and down completely randomly.
Pair Corralation between KB Financial and Anheuser-Busch InBev
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the Anheuser-Busch InBev. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.39 times less risky than Anheuser-Busch InBev. The stock trades about -0.04 of its potential returns per unit of risk. The Anheuser Busch InBev SANV is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 5,315 in Anheuser Busch InBev SANV on December 16, 2024 and sell it today you would earn a total of 917.00 from holding Anheuser Busch InBev SANV or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Anheuser Busch InBev SANV
Performance |
| Timeline |
| KB Financial Group |
| Anheuser Busch InBev |
KB Financial and Anheuser-Busch InBev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Anheuser-Busch InBev
The main advantage of trading using opposite KB Financial and Anheuser-Busch InBev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Anheuser-Busch InBev 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 Anheuser-Busch InBev will offset losses from the drop in Anheuser-Busch InBev's long position.| KB Financial vs. JPMorgan Chase Co | ||
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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