Correlation Between KB Financial and Cal-Maine Foods
Can any of the company-specific risk be diversified away by investing in both KB Financial and Cal-Maine Foods 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 Cal-Maine Foods 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 Cal Maine Foods, you can compare the effects of market volatilities on KB Financial and Cal-Maine Foods 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 Cal-Maine Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Cal-Maine Foods.
Diversification Opportunities for KB Financial and Cal-Maine Foods
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KBIA and Cal-Maine is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods 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 Cal-Maine Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of KB Financial i.e., KB Financial and Cal-Maine Foods go up and down completely randomly.
Pair Corralation between KB Financial and Cal-Maine Foods
Assuming the 90 days trading horizon KB Financial is expected to generate 1.8 times less return on investment than Cal-Maine Foods. In addition to that, KB Financial is 1.47 times more volatile than Cal Maine Foods. It trades about 0.12 of its total potential returns per unit of risk. Cal Maine Foods is currently generating about 0.32 per unit of volatility. If you would invest 8,084 in Cal Maine Foods on September 1, 2024 and sell it today you would earn a total of 1,044 from holding Cal Maine Foods or generate 12.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Cal Maine Foods
Performance |
| Timeline |
| KB Financial Group |
| Cal Maine Foods |
KB Financial and Cal-Maine Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Cal-Maine Foods
The main advantage of trading using opposite KB Financial and Cal-Maine Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Cal-Maine Foods 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 Cal-Maine Foods will offset losses from the drop in Cal-Maine Foods' long position.| KB Financial vs. Fast Retailing Co | KB Financial vs. SALESFORCE INC CDR | KB Financial vs. AGRICULTBK HADR25 YC | KB Financial vs. Dairy Farm International |
| Cal-Maine Foods vs. Gamma Communications plc | Cal-Maine Foods vs. Cogent Communications Holdings | Cal-Maine Foods vs. Entravision Communications | Cal-Maine Foods vs. Highlight Communications AG |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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