Correlation Between KB Financial and VR Resources
Can any of the company-specific risk be diversified away by investing in both KB Financial and VR Resources 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 VR Resources 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 VR Resources, you can compare the effects of market volatilities on KB Financial and VR Resources 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 VR Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and VR Resources.
Diversification Opportunities for KB Financial and VR Resources
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KB Financial and VRRCF is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and VR Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR Resources 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 VR Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR Resources has no effect on the direction of KB Financial i.e., KB Financial and VR Resources go up and down completely randomly.
Pair Corralation between KB Financial and VR Resources
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.37 times more return on investment than VR Resources. However, KB Financial Group is 2.73 times less risky than VR Resources. It trades about 0.17 of its potential returns per unit of risk. VR Resources is currently generating about -0.19 per unit of risk. If you would invest 6,524 in KB Financial Group on September 1, 2024 and sell it today you would earn a total of 369.00 from holding KB Financial Group or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. VR Resources
Performance |
| Timeline |
| KB Financial Group |
| VR Resources |
KB Financial and VR Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and VR Resources
The main advantage of trading using opposite KB Financial and VR Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, VR Resources 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 VR Resources will offset losses from the drop in VR Resources' long position.| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
| VR Resources vs. ATT Inc | VR Resources vs. Merck Company | VR Resources vs. Walt Disney | VR Resources vs. Caterpillar |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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