Correlation Between KB Financial and SCCB
Can any of the company-specific risk be diversified away by investing in both KB Financial and SCCB 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 SCCB 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 SCCB, you can compare the effects of market volatilities on KB Financial and SCCB 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 SCCB. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and SCCB.
Diversification Opportunities for KB Financial and SCCB
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and SCCB is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and SCCB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCCB 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 SCCB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCCB has no effect on the direction of KB Financial i.e., KB Financial and SCCB go up and down completely randomly.
Pair Corralation between KB Financial and SCCB
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 4.41 times more return on investment than SCCB. However, KB Financial is 4.41 times more volatile than SCCB. It trades about 0.06 of its potential returns per unit of risk. SCCB is currently generating about 0.07 per unit of risk. If you would invest 4,239 in KB Financial Group on August 31, 2024 and sell it today you would earn a total of 2,840 from holding KB Financial Group or generate 67.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 77.78% |
Values | Daily Returns |
KB Financial Group vs. SCCB
Performance |
Timeline |
KB Financial Group |
SCCB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KB Financial and SCCB Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and SCCB
The main advantage of trading using opposite KB Financial and SCCB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, SCCB 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 SCCB will offset losses from the drop in SCCB's 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 |
SCCB vs. Sachem Capital Corp | SCCB vs. Sachem Capital Corp | SCCB vs. B Riley Financial | SCCB vs. Eagle Point Credit |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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