Correlation Between KB Financial and Metal Sky
Can any of the company-specific risk be diversified away by investing in both KB Financial and Metal Sky 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 Metal Sky 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 Metal Sky Star, you can compare the effects of market volatilities on KB Financial and Metal Sky 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 Metal Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Metal Sky.
Diversification Opportunities for KB Financial and Metal Sky
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KB Financial and Metal is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Metal Sky Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metal Sky Star 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 Metal Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metal Sky Star has no effect on the direction of KB Financial i.e., KB Financial and Metal Sky go up and down completely randomly.
Pair Corralation between KB Financial and Metal Sky
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.95 times more return on investment than Metal Sky. However, KB Financial Group is 1.05 times less risky than Metal Sky. It trades about -0.02 of its potential returns per unit of risk. Metal Sky Star is currently generating about -0.21 per unit of risk. If you would invest 5,495 in KB Financial Group on January 13, 2025 and sell it today you would lose (157.00) from holding KB Financial Group or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Metal Sky Star
Performance |
| Timeline |
| KB Financial Group |
| Metal Sky Star |
KB Financial and Metal Sky Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Metal Sky
The main advantage of trading using opposite KB Financial and Metal Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Metal Sky 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 Metal Sky will offset losses from the drop in Metal Sky'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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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