Correlation Between KB Financial and TRU Precious
Can any of the company-specific risk be diversified away by investing in both KB Financial and TRU Precious 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 TRU Precious 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 TRU Precious Metals, you can compare the effects of market volatilities on KB Financial and TRU Precious 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 TRU Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and TRU Precious.
Diversification Opportunities for KB Financial and TRU Precious
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and TRU is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and TRU Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRU Precious Metals 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 TRU Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRU Precious Metals has no effect on the direction of KB Financial i.e., KB Financial and TRU Precious go up and down completely randomly.
Pair Corralation between KB Financial and TRU Precious
Allowing for the 90-day total investment horizon KB Financial is expected to generate 45.12 times less return on investment than TRU Precious. But when comparing it to its historical volatility, KB Financial Group is 10.24 times less risky than TRU Precious. It trades about 0.02 of its potential returns per unit of risk. TRU Precious Metals is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.28 in TRU Precious Metals on August 29, 2024 and sell it today you would earn a total of 0.14 from holding TRU Precious Metals or generate 10.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
KB Financial Group vs. TRU Precious Metals
Performance |
| Timeline |
| KB Financial Group |
| TRU Precious Metals |
KB Financial and TRU Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and TRU Precious
The main advantage of trading using opposite KB Financial and TRU Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, TRU Precious 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 TRU Precious will offset losses from the drop in TRU Precious' long position.| KB Financial vs. Home Federal Bancorp | KB Financial vs. First Northwest Bancorp | KB Financial vs. First Financial Northwest | KB Financial vs. First Capital |
| TRU Precious vs. Lavras Gold Corp | TRU Precious vs. Orefinders Resources | TRU Precious vs. North Peak Resources | TRU Precious vs. Nine Mile Metals |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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