Correlation Between KB Financial and Everest
Can any of the company-specific risk be diversified away by investing in both KB Financial and Everest 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 Everest 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 Everest Group, you can compare the effects of market volatilities on KB Financial and Everest 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 Everest. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Everest.
Diversification Opportunities for KB Financial and Everest
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and Everest is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest 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 Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of KB Financial i.e., KB Financial and Everest go up and down completely randomly.
Pair Corralation between KB Financial and Everest
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the Everest. In addition to that, KB Financial is 1.44 times more volatile than Everest Group. It trades about -0.04 of its total potential returns per unit of risk. Everest Group is currently generating about 0.02 per unit of volatility. If you would invest 34,916 in Everest Group on November 1, 2024 and sell it today you would earn a total of 293.00 from holding Everest Group or generate 0.84% 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. Everest Group
Performance |
| Timeline |
| KB Financial Group |
| Everest Group |
KB Financial and Everest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Everest
The main advantage of trading using opposite KB Financial and Everest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Everest 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 Everest will offset losses from the drop in Everest'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 |
| Everest vs. Hamilton Insurance Group, | Everest vs. Brookfield Wealth Solutions | Everest vs. Reinsurance Group of | Everest vs. Renaissancere 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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