Correlation Between KB Financial and Orix Corp
Can any of the company-specific risk be diversified away by investing in both KB Financial and Orix Corp 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 Orix Corp 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 Orix Corp Ads, you can compare the effects of market volatilities on KB Financial and Orix Corp 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 Orix Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Orix Corp.
Diversification Opportunities for KB Financial and Orix Corp
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KB Financial and Orix is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads 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 Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of KB Financial i.e., KB Financial and Orix Corp go up and down completely randomly.
Pair Corralation between KB Financial and Orix Corp
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.38 times more return on investment than Orix Corp. However, KB Financial is 1.38 times more volatile than Orix Corp Ads. It trades about 0.05 of its potential returns per unit of risk. Orix Corp Ads is currently generating about 0.03 per unit of risk. If you would invest 3,437 in KB Financial Group on January 11, 2025 and sell it today you would earn a total of 1,801 from holding KB Financial Group or generate 52.4% 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. Orix Corp Ads
Performance |
| Timeline |
| KB Financial Group |
| Orix Corp Ads |
KB Financial and Orix Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Orix Corp
The main advantage of trading using opposite KB Financial and Orix Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Orix Corp 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 Orix Corp will offset losses from the drop in Orix Corp's long position.| KB Financial vs. Shinhan Financial Group | ||
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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