Correlation Between KB Financial and Investec
Can any of the company-specific risk be diversified away by investing in both KB Financial and Investec 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 Investec 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 Investec Group, you can compare the effects of market volatilities on KB Financial and Investec 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 Investec. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Investec.
Diversification Opportunities for KB Financial and Investec
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Investec is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Investec Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Group 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 Investec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Group has no effect on the direction of KB Financial i.e., KB Financial and Investec go up and down completely randomly.
Pair Corralation between KB Financial and Investec
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the Investec. In addition to that, KB Financial is 4.36 times more volatile than Investec Group. It trades about -0.11 of its total potential returns per unit of risk. Investec Group is currently generating about 0.15 per unit of volatility. If you would invest 1,062 in Investec Group on September 22, 2024 and sell it today you would earn a total of 42.00 from holding Investec Group or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
KB Financial Group vs. Investec Group
Performance |
| Timeline |
| KB Financial Group |
| Investec Group |
KB Financial and Investec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Investec
The main advantage of trading using opposite KB Financial and Investec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Investec 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 Investec will offset losses from the drop in Investec's long position.| KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares | KB Financial vs. Foreign Trade Bank |
| Investec vs. Turning Point Brands | Investec vs. BCE Inc | Investec vs. Weibo Corp | Investec vs. Molson Coors Brewing |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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