Correlation Between KB Financial and Virginia National
Can any of the company-specific risk be diversified away by investing in both KB Financial and Virginia National 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 Virginia National 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 Virginia National Bankshares, you can compare the effects of market volatilities on KB Financial and Virginia National 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 Virginia National. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Virginia National.
Diversification Opportunities for KB Financial and Virginia National
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KB Financial and Virginia is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Virginia National Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virginia National 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 Virginia National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virginia National has no effect on the direction of KB Financial i.e., KB Financial and Virginia National go up and down completely randomly.
Pair Corralation between KB Financial and Virginia National
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.89 times more return on investment than Virginia National. However, KB Financial Group is 1.13 times less risky than Virginia National. It trades about 0.09 of its potential returns per unit of risk. Virginia National Bankshares is currently generating about 0.05 per unit of risk. If you would invest 3,519 in KB Financial Group on August 27, 2024 and sell it today you would earn a total of 3,474 from holding KB Financial Group or generate 98.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Virginia National Bankshares
Performance |
| Timeline |
| KB Financial Group |
| Virginia National |
KB Financial and Virginia National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Virginia National
The main advantage of trading using opposite KB Financial and Virginia National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Virginia National 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 Virginia National will offset losses from the drop in Virginia National'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 |
| Virginia National vs. Fifth Third Bancorp | Virginia National vs. Zions Bancorporation | Virginia National vs. Huntington Bancshares Incorporated | Virginia National vs. PNC Financial Services |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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