Correlation Between KB Financial and KWG Resources
Can any of the company-specific risk be diversified away by investing in both KB Financial and KWG Resources 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 KWG Resources 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 KWG Resources, you can compare the effects of market volatilities on KB Financial and KWG Resources 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 KWG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and KWG Resources.
Diversification Opportunities for KB Financial and KWG Resources
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and KWG is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and KWG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWG Resources 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 KWG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWG Resources has no effect on the direction of KB Financial i.e., KB Financial and KWG Resources go up and down completely randomly.
Pair Corralation between KB Financial and KWG Resources
Allowing for the 90-day total investment horizon KB Financial is expected to generate 52.18 times less return on investment than KWG Resources. But when comparing it to its historical volatility, KB Financial Group is 8.41 times less risky than KWG Resources. It trades about 0.02 of its potential returns per unit of risk. KWG Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.80 in KWG Resources on August 29, 2024 and sell it today you would earn a total of 0.25 from holding KWG Resources or generate 31.25% 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. KWG Resources
Performance |
| Timeline |
| KB Financial Group |
| KWG Resources |
KB Financial and KWG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and KWG Resources
The main advantage of trading using opposite KB Financial and KWG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, KWG Resources 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 KWG Resources will offset losses from the drop in KWG Resources' long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| KWG Resources vs. Ascendant Resources | KWG Resources vs. Cantex Mine Development | KWG Resources vs. Amarc Resources | KWG Resources vs. Sterling Metals Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |