Correlation Between KB Financial and US Bancorp
Can any of the company-specific risk be diversified away by investing in both KB Financial and US Bancorp 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 US Bancorp 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 US Bancorp PERP, you can compare the effects of market volatilities on KB Financial and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and US Bancorp.
Diversification Opportunities for KB Financial and US Bancorp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and USB-PA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and US Bancorp PERP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp PERP 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp PERP has no effect on the direction of KB Financial i.e., KB Financial and US Bancorp go up and down completely randomly.
Pair Corralation between KB Financial and US Bancorp
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 2.27 times more return on investment than US Bancorp. However, KB Financial is 2.27 times more volatile than US Bancorp PERP. It trades about 0.08 of its potential returns per unit of risk. US Bancorp PERP is currently generating about 0.06 per unit of risk. If you would invest 3,540 in KB Financial Group on August 27, 2024 and sell it today you would earn a total of 3,453 from holding KB Financial Group or generate 97.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. US Bancorp PERP
Performance |
| Timeline |
| KB Financial Group |
| US Bancorp PERP |
KB Financial and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and US Bancorp
The main advantage of trading using opposite KB Financial and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| US Bancorp vs. KeyCorp | US Bancorp vs. Associated Banc Corp | US Bancorp vs. New York Community | US Bancorp vs. Synovus Financial Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |