Correlation Between KB Financial and Halma Plc
Can any of the company-specific risk be diversified away by investing in both KB Financial and Halma Plc 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 Halma Plc 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 Halma plc, you can compare the effects of market volatilities on KB Financial and Halma Plc 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 Halma Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Halma Plc.
Diversification Opportunities for KB Financial and Halma Plc
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Halma is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Halma plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halma plc 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 Halma Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halma plc has no effect on the direction of KB Financial i.e., KB Financial and Halma Plc go up and down completely randomly.
Pair Corralation between KB Financial and Halma Plc
Allowing for the 90-day total investment horizon KB Financial is expected to generate 3.26 times less return on investment than Halma Plc. But when comparing it to its historical volatility, KB Financial Group is 1.02 times less risky than Halma Plc. It trades about 0.02 of its potential returns per unit of risk. Halma plc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,332 in Halma plc on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Halma plc or generate 2.49% 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. Halma plc
Performance |
| Timeline |
| KB Financial Group |
| Halma plc |
KB Financial and Halma Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Halma Plc
The main advantage of trading using opposite KB Financial and Halma Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Halma Plc 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 Halma Plc will offset losses from the drop in Halma Plc's long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| Halma Plc vs. Griffon | Halma Plc vs. Brookfield Business Partners | Halma Plc vs. MDU Resources Group | Halma Plc vs. Matthews International |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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