Correlation Between KB Financial and First Community
Can any of the company-specific risk be diversified away by investing in both KB Financial and First Community 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 First Community 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 First Community, you can compare the effects of market volatilities on KB Financial and First Community 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 First Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and First Community.
Diversification Opportunities for KB Financial and First Community
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and First is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and First Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Community 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 First Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Community has no effect on the direction of KB Financial i.e., KB Financial and First Community go up and down completely randomly.
Pair Corralation between KB Financial and First Community
Allowing for the 90-day total investment horizon KB Financial is expected to generate 2.12 times less return on investment than First Community. But when comparing it to its historical volatility, KB Financial Group is 1.05 times less risky than First Community. It trades about 0.08 of its potential returns per unit of risk. First Community is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,626 in First Community on September 3, 2024 and sell it today you would earn a total of 989.00 from holding First Community or generate 60.82% 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. First Community
Performance |
| Timeline |
| KB Financial Group |
| First Community |
KB Financial and First Community Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and First Community
The main advantage of trading using opposite KB Financial and First Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, First Community 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 First Community will offset losses from the drop in First Community'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 |
| First Community vs. JPMorgan Chase Co | First Community vs. Citigroup | First Community vs. Wells Fargo | First Community vs. Toronto Dominion Bank |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Transaction History View history of all your transactions and understand their impact on performance |