Correlation Between KB Financial and Falcon Gold
Can any of the company-specific risk be diversified away by investing in both KB Financial and Falcon Gold 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 Falcon Gold 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 Falcon Gold Corp, you can compare the effects of market volatilities on KB Financial and Falcon Gold 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 Falcon Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Falcon Gold.
Diversification Opportunities for KB Financial and Falcon Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Falcon is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Falcon Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Gold Corp 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 Falcon Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Gold Corp has no effect on the direction of KB Financial i.e., KB Financial and Falcon Gold go up and down completely randomly.
Pair Corralation between KB Financial and Falcon Gold
Allowing for the 90-day total investment horizon KB Financial is expected to generate 2.95 times less return on investment than Falcon Gold. But when comparing it to its historical volatility, KB Financial Group is 4.52 times less risky than Falcon Gold. It trades about 0.1 of its potential returns per unit of risk. Falcon Gold Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1.65 in Falcon Gold Corp on August 25, 2024 and sell it today you would earn a total of 0.87 from holding Falcon Gold Corp or generate 52.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Falcon Gold Corp
Performance |
| Timeline |
| KB Financial Group |
| Falcon Gold Corp |
KB Financial and Falcon Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Falcon Gold
The main advantage of trading using opposite KB Financial and Falcon Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Falcon Gold 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 Falcon Gold will offset losses from the drop in Falcon Gold's long position.| KB Financial vs. Banco Bradesco SA | KB Financial vs. Itau Unibanco Banco | KB Financial vs. Banco Santander Brasil | KB Financial vs. Western Alliance Bancorporation |
| Falcon Gold vs. Aurion Resources | Falcon Gold vs. Liberty Gold Corp | Falcon Gold vs. Rio2 Limited | Falcon Gold vs. Orezone Gold Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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