Correlation Between KB Financial and Canada Rare
Can any of the company-specific risk be diversified away by investing in both KB Financial and Canada Rare 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 Canada Rare 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 Canada Rare Earth, you can compare the effects of market volatilities on KB Financial and Canada Rare 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 Canada Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Canada Rare.
Diversification Opportunities for KB Financial and Canada Rare
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Canada is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Canada Rare Earth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Rare Earth 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 Canada Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Rare Earth has no effect on the direction of KB Financial i.e., KB Financial and Canada Rare go up and down completely randomly.
Pair Corralation between KB Financial and Canada Rare
Allowing for the 90-day total investment horizon KB Financial is expected to generate 118.99 times less return on investment than Canada Rare. But when comparing it to its historical volatility, KB Financial Group is 21.15 times less risky than Canada Rare. It trades about 0.02 of its potential returns per unit of risk. Canada Rare Earth is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Canada Rare Earth on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Canada Rare Earth or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Canada Rare Earth
Performance |
| Timeline |
| KB Financial Group |
| Canada Rare Earth |
KB Financial and Canada Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Canada Rare
The main advantage of trading using opposite KB Financial and Canada Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Canada Rare 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 Canada Rare will offset losses from the drop in Canada Rare's long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
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
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |