Correlation Between KB Financial and William Penn
Can any of the company-specific risk be diversified away by investing in both KB Financial and William Penn 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 William Penn 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 William Penn Bancorp, you can compare the effects of market volatilities on KB Financial and William Penn 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 William Penn. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and William Penn.
Diversification Opportunities for KB Financial and William Penn
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KB Financial and William is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and William Penn Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on William Penn Bancorp 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 William Penn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of William Penn Bancorp has no effect on the direction of KB Financial i.e., KB Financial and William Penn go up and down completely randomly.
Pair Corralation between KB Financial and William Penn
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.99 times more return on investment than William Penn. However, KB Financial Group is 1.01 times less risky than William Penn. It trades about 0.17 of its potential returns per unit of risk. William Penn Bancorp is currently generating about 0.12 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. William Penn Bancorp
Performance |
| Timeline |
| KB Financial Group |
| William Penn Bancorp |
KB Financial and William Penn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and William Penn
The main advantage of trading using opposite KB Financial and William Penn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, William Penn 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 William Penn will offset losses from the drop in William Penn'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 |
| William Penn vs. Home Federal Bancorp | William Penn vs. First Financial Northwest | William Penn vs. First Northwest Bancorp | William Penn vs. First Capital |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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