Correlation Between KB Financial and Grupo Supervielle

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Can any of the company-specific risk be diversified away by investing in both KB Financial and Grupo Supervielle 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 Grupo Supervielle 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 Grupo Supervielle SA, you can compare the effects of market volatilities on KB Financial and Grupo Supervielle 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 Grupo Supervielle. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Grupo Supervielle.

Diversification Opportunities for KB Financial and Grupo Supervielle

-0.8
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between KB Financial and Grupo is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Grupo Supervielle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Supervielle 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 Grupo Supervielle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Supervielle has no effect on the direction of KB Financial i.e., KB Financial and Grupo Supervielle go up and down completely randomly.

Pair Corralation between KB Financial and Grupo Supervielle

Allowing for the 90-day total investment horizon KB Financial is expected to generate 5.82 times less return on investment than Grupo Supervielle. But when comparing it to its historical volatility, KB Financial Group is 2.03 times less risky than Grupo Supervielle. It trades about 0.04 of its potential returns per unit of risk. Grupo Supervielle SA is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  264.00  in Grupo Supervielle SA on October 13, 2024 and sell it today you would earn a total of  1,652  from holding Grupo Supervielle SA or generate 625.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

KB Financial Group  vs.  Grupo Supervielle SA

 Performance 
       Timeline  
KB Financial Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Grupo Supervielle 

Risk-Adjusted Performance

31 of 100

 
Weak
 
Strong
Very Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Supervielle SA are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Grupo Supervielle showed solid returns over the last few months and may actually be approaching a breakup point.

KB Financial and Grupo Supervielle Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KB Financial and Grupo Supervielle

The main advantage of trading using opposite KB Financial and Grupo Supervielle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Grupo Supervielle 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 Grupo Supervielle will offset losses from the drop in Grupo Supervielle's long position.
The idea behind KB Financial Group and Grupo Supervielle SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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