Correlation Between KB Financial and Signature Bank
Can any of the company-specific risk be diversified away by investing in both KB Financial and Signature Bank 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 Signature Bank 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 Signature Bank, you can compare the effects of market volatilities on KB Financial and Signature Bank 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 Signature Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Signature Bank.
Diversification Opportunities for KB Financial and Signature Bank
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KB Financial and Signature is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Signature Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signature Bank 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 Signature Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signature Bank has no effect on the direction of KB Financial i.e., KB Financial and Signature Bank go up and down completely randomly.
Pair Corralation between KB Financial and Signature Bank
If you would invest 6,881 in KB Financial Group on August 30, 2024 and sell it today you would earn a total of 198.00 from holding KB Financial Group or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
KB Financial Group vs. Signature Bank
Performance |
| Timeline |
| KB Financial Group |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KB Financial and Signature Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Signature Bank
The main advantage of trading using opposite KB Financial and Signature Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Signature Bank 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 Signature Bank will offset losses from the drop in Signature Bank's long position.| KB Financial vs. JPMorgan Chase Co | KB Financial vs. Citigroup | KB Financial vs. Wells Fargo | KB Financial vs. Toronto Dominion Bank |
| Signature Bank vs. PennantPark Floating Rate | Signature Bank vs. GMS Inc | Signature Bank vs. Stepstone Group | Signature Bank vs. Griffon |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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