Correlation Between KB Financial and G6 Materials
Can any of the company-specific risk be diversified away by investing in both KB Financial and G6 Materials 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 G6 Materials 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 G6 Materials Corp, you can compare the effects of market volatilities on KB Financial and G6 Materials 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 G6 Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and G6 Materials.
Diversification Opportunities for KB Financial and G6 Materials
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and GPHBF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and G6 Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G6 Materials 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 G6 Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G6 Materials Corp has no effect on the direction of KB Financial i.e., KB Financial and G6 Materials go up and down completely randomly.
Pair Corralation between KB Financial and G6 Materials
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.15 times more return on investment than G6 Materials. However, KB Financial Group is 6.47 times less risky than G6 Materials. It trades about 0.17 of its potential returns per unit of risk. G6 Materials Corp is currently generating about -0.01 per unit of risk. If you would invest 6,524 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 369.00 from holding KB Financial Group or generate 5.66% 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. G6 Materials Corp
Performance |
| Timeline |
| KB Financial Group |
| G6 Materials Corp |
KB Financial and G6 Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and G6 Materials
The main advantage of trading using opposite KB Financial and G6 Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, G6 Materials 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 G6 Materials will offset losses from the drop in G6 Materials' long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| G6 Materials vs. Sherwin Williams Co | G6 Materials vs. Air Liquide SA | G6 Materials vs. Air Products and | G6 Materials vs. Ecolab Inc |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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