Correlation Between KB Financial and TGS ASA
Can any of the company-specific risk be diversified away by investing in both KB Financial and TGS ASA 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 TGS ASA 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 TGS ASA, you can compare the effects of market volatilities on KB Financial and TGS ASA 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 TGS ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and TGS ASA.
Diversification Opportunities for KB Financial and TGS ASA
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KB Financial and TGS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and TGS ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGS ASA 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 TGS ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGS ASA has no effect on the direction of KB Financial i.e., KB Financial and TGS ASA go up and down completely randomly.
Pair Corralation between KB Financial and TGS ASA
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.88 times more return on investment than TGS ASA. However, KB Financial Group is 1.13 times less risky than TGS ASA. It trades about 0.08 of its potential returns per unit of risk. TGS ASA is currently generating about -0.31 per unit of risk. If you would invest 5,645 in KB Financial Group on January 24, 2025 and sell it today you would earn a total of 274.00 from holding KB Financial Group or generate 4.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. TGS ASA
Performance |
| Timeline |
| KB Financial Group |
| TGS ASA |
KB Financial and TGS ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and TGS ASA
The main advantage of trading using opposite KB Financial and TGS ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, TGS ASA 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 TGS ASA will offset losses from the drop in TGS ASA's long position.| KB Financial vs. Grupo Financiero Galicia | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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