Correlation Between KB Financial and Accor SA
Can any of the company-specific risk be diversified away by investing in both KB Financial and Accor SA 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 Accor SA 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 Accor SA, you can compare the effects of market volatilities on KB Financial and Accor SA 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 Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Accor SA.
Diversification Opportunities for KB Financial and Accor SA
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KBIA and Accor is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA 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 Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of KB Financial i.e., KB Financial and Accor SA go up and down completely randomly.
Pair Corralation between KB Financial and Accor SA
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.85 times more return on investment than Accor SA. However, KB Financial is 1.85 times more volatile than Accor SA. It trades about 0.13 of its potential returns per unit of risk. Accor SA is currently generating about 0.1 per unit of risk. If you would invest 5,700 in KB Financial Group on August 28, 2024 and sell it today you would earn a total of 800.00 from holding KB Financial Group or generate 14.04% 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. Accor SA
Performance |
| Timeline |
| KB Financial Group |
| Accor SA |
KB Financial and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Accor SA
The main advantage of trading using opposite KB Financial and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Accor SA 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 Accor SA will offset losses from the drop in Accor SA's long position.| KB Financial vs. GOLD ROAD RES | KB Financial vs. ECHO INVESTMENT ZY | KB Financial vs. Air Transport Services | KB Financial vs. TITANIUM TRANSPORTGROUP |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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