Correlation Between KB Financial and Power Metals
Can any of the company-specific risk be diversified away by investing in both KB Financial and Power Metals 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 Power Metals 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 Power Metals Corp, you can compare the effects of market volatilities on KB Financial and Power Metals 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 Power Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Power Metals.
Diversification Opportunities for KB Financial and Power Metals
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and Power is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Power Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Metals Corp 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 Power Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Metals Corp has no effect on the direction of KB Financial i.e., KB Financial and Power Metals go up and down completely randomly.
Pair Corralation between KB Financial and Power Metals
Allowing for the 90-day total investment horizon KB Financial is expected to generate 2.38 times less return on investment than Power Metals. But when comparing it to its historical volatility, KB Financial Group is 2.04 times less risky than Power Metals. It trades about 0.05 of its potential returns per unit of risk. Power Metals Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Power Metals Corp on November 5, 2024 and sell it today you would earn a total of 12.00 from holding Power Metals Corp or generate 60.0% 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. Power Metals Corp
Performance |
| Timeline |
| KB Financial Group |
| Power Metals Corp |
KB Financial and Power Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Power Metals
The main advantage of trading using opposite KB Financial and Power Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Power Metals 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 Power Metals will offset losses from the drop in Power Metals' long position.| KB Financial vs. Shinhan Financial Group | KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads |
| Power Metals vs. GoMgA Resources | Power Metals vs. Infinite Ore Corp | Power Metals vs. FPX Nickel Corp | Power Metals vs. International Lithium 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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