Correlation Between KB Financial and Bank Ozk
Can any of the company-specific risk be diversified away by investing in both KB Financial and Bank Ozk 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 Bank Ozk 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 Bank Ozk Preferred, you can compare the effects of market volatilities on KB Financial and Bank Ozk 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 Bank Ozk. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Bank Ozk.
Diversification Opportunities for KB Financial and Bank Ozk
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between KB Financial and Bank is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Bank Ozk Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ozk Preferred 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 Bank Ozk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ozk Preferred has no effect on the direction of KB Financial i.e., KB Financial and Bank Ozk go up and down completely randomly.
Pair Corralation between KB Financial and Bank Ozk
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.36 times more return on investment than Bank Ozk. However, KB Financial is 1.36 times more volatile than Bank Ozk Preferred. It trades about 0.04 of its potential returns per unit of risk. Bank Ozk Preferred is currently generating about -0.36 per unit of risk. If you would invest 5,414 in KB Financial Group on January 2, 2025 and sell it today you would earn a total of 50.00 from holding KB Financial Group or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
KB Financial Group vs. Bank Ozk Preferred
Performance |
| Timeline |
| KB Financial Group |
| Bank Ozk Preferred |
KB Financial and Bank Ozk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Bank Ozk
The main advantage of trading using opposite KB Financial and Bank Ozk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Bank Ozk 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 Bank Ozk will offset losses from the drop in Bank Ozk'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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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