Correlation Between KB Financial and CAT Strategic
Can any of the company-specific risk be diversified away by investing in both KB Financial and CAT Strategic 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 CAT Strategic 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 CAT Strategic Metals, you can compare the effects of market volatilities on KB Financial and CAT Strategic 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 CAT Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and CAT Strategic.
Diversification Opportunities for KB Financial and CAT Strategic
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and CAT is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and CAT Strategic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAT Strategic Metals 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 CAT Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAT Strategic Metals has no effect on the direction of KB Financial i.e., KB Financial and CAT Strategic go up and down completely randomly.
Pair Corralation between KB Financial and CAT Strategic
Allowing for the 90-day total investment horizon KB Financial is expected to generate 21.25 times less return on investment than CAT Strategic. But when comparing it to its historical volatility, KB Financial Group is 15.78 times less risky than CAT Strategic. It trades about 0.09 of its potential returns per unit of risk. CAT Strategic Metals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.38 in CAT Strategic Metals on August 29, 2024 and sell it today you would earn a total of 0.02 from holding CAT Strategic Metals or generate 5.26% 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. CAT Strategic Metals
Performance |
| Timeline |
| KB Financial Group |
| CAT Strategic Metals |
KB Financial and CAT Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and CAT Strategic
The main advantage of trading using opposite KB Financial and CAT Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, CAT Strategic 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 CAT Strategic will offset losses from the drop in CAT Strategic's long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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