Correlation Between KB Financial and Citizens Financial
Can any of the company-specific risk be diversified away by investing in both KB Financial and Citizens 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 Citizens 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 Citizens Financial Group,, you can compare the effects of market volatilities on KB Financial and Citizens 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 Citizens Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Citizens Financial.
Diversification Opportunities for KB Financial and Citizens Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KB Financial and Citizens is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of KB Financial i.e., KB Financial and Citizens Financial go up and down completely randomly.
Pair Corralation between KB Financial and Citizens Financial
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the Citizens Financial. In addition to that, KB Financial is 2.73 times more volatile than Citizens Financial Group,. It trades about -0.04 of its total potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.04 per unit of volatility. If you would invest 2,649 in Citizens Financial Group, on November 1, 2024 and sell it today you would earn a total of 39.00 from holding Citizens Financial Group, or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Citizens Financial Group,
Performance |
| Timeline |
| KB Financial Group |
| Citizens Financial Group, |
KB Financial and Citizens Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Citizens Financial
The main advantage of trading using opposite KB Financial and Citizens Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Citizens 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 Citizens Financial will offset losses from the drop in Citizens Financial'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 |
| Citizens Financial vs. Axos Financial | Citizens Financial vs. Byline Bancorp | Citizens Financial vs. KB Financial Group | Citizens Financial vs. Nu Holdings |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |