Correlation Between KB Financial and Vior
Can any of the company-specific risk be diversified away by investing in both KB Financial and Vior 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 Vior 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 Vior Inc, you can compare the effects of market volatilities on KB Financial and Vior 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 Vior. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Vior.
Diversification Opportunities for KB Financial and Vior
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and Vior is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Vior Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vior Inc 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 Vior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vior Inc has no effect on the direction of KB Financial i.e., KB Financial and Vior go up and down completely randomly.
Pair Corralation between KB Financial and Vior
Allowing for the 90-day total investment horizon KB Financial is expected to generate 1.07 times less return on investment than Vior. But when comparing it to its historical volatility, KB Financial Group is 2.39 times less risky than Vior. It trades about 0.11 of its potential returns per unit of risk. Vior Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Vior Inc on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Vior Inc or generate 33.33% 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. Vior Inc
Performance |
| Timeline |
| KB Financial Group |
| Vior Inc |
KB Financial and Vior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Vior
The main advantage of trading using opposite KB Financial and Vior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Vior 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 Vior will offset losses from the drop in Vior'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 |
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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