Correlation Between KB Financial and George Weston
Can any of the company-specific risk be diversified away by investing in both KB Financial and George Weston 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 George Weston 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 George Weston Limited, you can compare the effects of market volatilities on KB Financial and George Weston 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 George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and George Weston.
Diversification Opportunities for KB Financial and George Weston
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KB Financial and George is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and George Weston Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Weston Limited 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 George Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Weston Limited has no effect on the direction of KB Financial i.e., KB Financial and George Weston go up and down completely randomly.
Pair Corralation between KB Financial and George Weston
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the George Weston. In addition to that, KB Financial is 2.28 times more volatile than George Weston Limited. It trades about -0.21 of its total potential returns per unit of risk. George Weston Limited is currently generating about 0.02 per unit of volatility. If you would invest 15,232 in George Weston Limited on November 28, 2024 and sell it today you would earn a total of 26.00 from holding George Weston Limited or generate 0.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
KB Financial Group vs. George Weston Limited
Performance |
| Timeline |
| KB Financial Group |
| George Weston Limited |
KB Financial and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and George Weston
The main advantage of trading using opposite KB Financial and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, George Weston 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 George Weston will offset losses from the drop in George Weston'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 |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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