Correlation Between KB Financial and Sportsquest
Can any of the company-specific risk be diversified away by investing in both KB Financial and Sportsquest 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 Sportsquest 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 Sportsquest, you can compare the effects of market volatilities on KB Financial and Sportsquest 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 Sportsquest. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Sportsquest.
Diversification Opportunities for KB Financial and Sportsquest
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and Sportsquest is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Sportsquest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sportsquest 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 Sportsquest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sportsquest has no effect on the direction of KB Financial i.e., KB Financial and Sportsquest go up and down completely randomly.
Pair Corralation between KB Financial and Sportsquest
Allowing for the 90-day total investment horizon KB Financial is expected to generate 3.49 times less return on investment than Sportsquest. But when comparing it to its historical volatility, KB Financial Group is 7.32 times less risky than Sportsquest. It trades about 0.09 of its potential returns per unit of risk. Sportsquest is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.11 in Sportsquest on August 31, 2024 and sell it today you would lose (0.09) from holding Sportsquest or give up 81.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
KB Financial Group vs. Sportsquest
Performance |
| Timeline |
| KB Financial Group |
| Sportsquest |
KB Financial and Sportsquest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Sportsquest
The main advantage of trading using opposite KB Financial and Sportsquest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Sportsquest 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 Sportsquest will offset losses from the drop in Sportsquest'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 |
| Sportsquest vs. Parks America | Sportsquest vs. Mattel Inc | Sportsquest vs. Carnival Plc ADS | Sportsquest vs. Hasbro Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |