Correlation Between KB Financial and SHF Holdings
Can any of the company-specific risk be diversified away by investing in both KB Financial and SHF Holdings 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 SHF Holdings 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 SHF Holdings, you can compare the effects of market volatilities on KB Financial and SHF Holdings 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 SHF Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and SHF Holdings.
Diversification Opportunities for KB Financial and SHF Holdings
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between KB Financial and SHF is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and SHF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHF Holdings 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 SHF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHF Holdings has no effect on the direction of KB Financial i.e., KB Financial and SHF Holdings go up and down completely randomly.
Pair Corralation between KB Financial and SHF Holdings
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the SHF Holdings. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 3.15 times less risky than SHF Holdings. The stock trades about -0.23 of its potential returns per unit of risk. The SHF Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 40.00 in SHF Holdings on November 27, 2024 and sell it today you would lose (3.00) from holding SHF Holdings or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. SHF Holdings
Performance |
| Timeline |
| KB Financial Group |
| SHF Holdings |
KB Financial and SHF Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and SHF Holdings
The main advantage of trading using opposite KB Financial and SHF Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, SHF Holdings 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 SHF Holdings will offset losses from the drop in SHF Holdings' 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 |
| SHF Holdings vs. Finward Bancorp | SHF Holdings vs. Northfield Bancorp | SHF Holdings vs. Community West Bancshares | SHF Holdings vs. First Community |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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