Correlation Between KB Financial and Bridgewater Bancshares
Can any of the company-specific risk be diversified away by investing in both KB Financial and Bridgewater Bancshares 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 Bridgewater Bancshares 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 Bridgewater Bancshares, you can compare the effects of market volatilities on KB Financial and Bridgewater Bancshares 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 Bridgewater Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Bridgewater Bancshares.
Diversification Opportunities for KB Financial and Bridgewater Bancshares
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and Bridgewater is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Bridgewater Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridgewater Bancshares 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 Bridgewater Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridgewater Bancshares has no effect on the direction of KB Financial i.e., KB Financial and Bridgewater Bancshares go up and down completely randomly.
Pair Corralation between KB Financial and Bridgewater Bancshares
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.16 times more return on investment than Bridgewater Bancshares. However, KB Financial is 1.16 times more volatile than Bridgewater Bancshares. It trades about 0.11 of its potential returns per unit of risk. Bridgewater Bancshares is currently generating about 0.06 per unit of risk. If you would invest 3,716 in KB Financial Group on September 4, 2024 and sell it today you would earn a total of 3,160 from holding KB Financial Group or generate 85.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Bridgewater Bancshares
Performance |
| Timeline |
| KB Financial Group |
| Bridgewater Bancshares |
KB Financial and Bridgewater Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Bridgewater Bancshares
The main advantage of trading using opposite KB Financial and Bridgewater Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Bridgewater Bancshares 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 Bridgewater Bancshares will offset losses from the drop in Bridgewater Bancshares' long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| Bridgewater Bancshares vs. International Bancshares | Bridgewater Bancshares vs. Finward Bancorp | Bridgewater Bancshares vs. Aquagold International | Bridgewater Bancshares vs. Thrivent High Yield |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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