Correlation Between KB Financial and Ambev SA
Can any of the company-specific risk be diversified away by investing in both KB Financial and Ambev 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 Ambev 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 Ambev SA, you can compare the effects of market volatilities on KB Financial and Ambev 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 Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Ambev SA.
Diversification Opportunities for KB Financial and Ambev SA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBIA and Ambev is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Ambev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev 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 Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA has no effect on the direction of KB Financial i.e., KB Financial and Ambev SA go up and down completely randomly.
Pair Corralation between KB Financial and Ambev SA
Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the Ambev SA. In addition to that, KB Financial is 1.2 times more volatile than Ambev SA. It trades about -0.26 of its total potential returns per unit of risk. Ambev SA is currently generating about -0.08 per unit of volatility. If you would invest 204.00 in Ambev SA on September 23, 2024 and sell it today you would lose (9.00) from holding Ambev SA or give up 4.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Ambev SA
Performance |
| Timeline |
| KB Financial Group |
| Ambev SA |
KB Financial and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Ambev SA
The main advantage of trading using opposite KB Financial and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Ambev 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 Ambev SA will offset losses from the drop in Ambev SA's long position.| KB Financial vs. China Merchants Bank | KB Financial vs. HDFC Bank Limited | KB Financial vs. ICICI Bank Limited | KB Financial vs. PT Bank Central |
| Ambev SA vs. ECHO INVESTMENT ZY | Ambev SA vs. PT Ace Hardware | Ambev SA vs. Strategic Investments AS | Ambev SA vs. JLF INVESTMENT |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |