Correlation Between KB Financial and Village Bank
Can any of the company-specific risk be diversified away by investing in both KB Financial and Village Bank 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 Village Bank 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 Village Bank and, you can compare the effects of market volatilities on KB Financial and Village Bank 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 Village Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Village Bank.
Diversification Opportunities for KB Financial and Village Bank
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KB Financial and Village is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Village Bank and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Village Bank 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 Village Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Village Bank has no effect on the direction of KB Financial i.e., KB Financial and Village Bank go up and down completely randomly.
Pair Corralation between KB Financial and Village Bank
Allowing for the 90-day total investment horizon KB Financial is expected to generate 1.91 times less return on investment than Village Bank. But when comparing it to its historical volatility, KB Financial Group is 1.4 times less risky than Village Bank. It trades about 0.09 of its potential returns per unit of risk. Village Bank and is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,055 in Village Bank and on November 9, 2024 and sell it today you would earn a total of 3,815 from holding Village Bank and or generate 94.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.79% |
| Values | Daily Returns |
KB Financial Group vs. Village Bank and
Performance |
| Timeline |
| KB Financial Group |
| Village Bank |
KB Financial and Village Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Village Bank
The main advantage of trading using opposite KB Financial and Village Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Village Bank 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 Village Bank will offset losses from the drop in Village Bank's long position.| KB Financial vs. Shinhan Financial Group | KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads |
| Village Bank vs. Prime Meridian Holding | Village Bank vs. William Penn Bancorp | Village Bank vs. Pathfinder Bancorp | Village Bank vs. Magyar Bancorp |
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..
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