Correlation Between KB Financial and CNB Financial
Can any of the company-specific risk be diversified away by investing in both KB Financial and CNB Financial 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 CNB Financial 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 CNB Financial, you can compare the effects of market volatilities on KB Financial and CNB Financial 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 CNB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and CNB Financial.
Diversification Opportunities for KB Financial and CNB Financial
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and CNB is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and CNB Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Financial 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 CNB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Financial has no effect on the direction of KB Financial i.e., KB Financial and CNB Financial go up and down completely randomly.
Pair Corralation between KB Financial and CNB Financial
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.11 times more return on investment than CNB Financial. However, KB Financial is 1.11 times more volatile than CNB Financial. It trades about 0.13 of its potential returns per unit of risk. CNB Financial is currently generating about 0.08 per unit of risk. If you would invest 5,922 in KB Financial Group on October 20, 2024 and sell it today you would earn a total of 204.00 from holding KB Financial Group or generate 3.44% 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. CNB Financial
Performance |
| Timeline |
| KB Financial Group |
| CNB Financial |
KB Financial and CNB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and CNB Financial
The main advantage of trading using opposite KB Financial and CNB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, CNB Financial 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 CNB Financial will offset losses from the drop in CNB Financial's long position.| KB Financial vs. JPMorgan Chase Co | KB Financial vs. Citigroup | KB Financial vs. Wells Fargo | KB Financial vs. Toronto Dominion Bank |
| CNB Financial vs. Heartland Financial USA | CNB Financial vs. Dime Community Bancshares | CNB Financial vs. Pinnacle Financial Partners | CNB Financial vs. Fulton Financial |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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