Correlation Between KB Financial and IF Bancorp
Can any of the company-specific risk be diversified away by investing in both KB Financial and IF Bancorp 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 IF Bancorp 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 IF Bancorp, you can compare the effects of market volatilities on KB Financial and IF Bancorp 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 IF Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and IF Bancorp.
Diversification Opportunities for KB Financial and IF Bancorp
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KB Financial and IROQ is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and IF Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IF Bancorp 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 IF Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IF Bancorp has no effect on the direction of KB Financial i.e., KB Financial and IF Bancorp go up and down completely randomly.
Pair Corralation between KB Financial and IF Bancorp
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.62 times more return on investment than IF Bancorp. However, KB Financial Group is 1.61 times less risky than IF Bancorp. It trades about 0.05 of its potential returns per unit of risk. IF Bancorp is currently generating about -0.06 per unit of risk. If you would invest 6,879 in KB Financial Group on August 28, 2024 and sell it today you would earn a total of 97.00 from holding KB Financial Group or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. IF Bancorp
Performance |
| Timeline |
| KB Financial Group |
| IF Bancorp |
KB Financial and IF Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and IF Bancorp
The main advantage of trading using opposite KB Financial and IF Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, IF Bancorp 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 IF Bancorp will offset losses from the drop in IF Bancorp'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 |
| IF Bancorp vs. Home Bancorp | IF Bancorp vs. Commerzbank AG PK | IF Bancorp vs. ConnectOne Bancorp | IF Bancorp vs. Home Federal Bancorp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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