Correlation Between KB Financial and Great Portland
Can any of the company-specific risk be diversified away by investing in both KB Financial and Great Portland 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 Great Portland 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 Great Portland Estates, you can compare the effects of market volatilities on KB Financial and Great Portland 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 Great Portland. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Great Portland.
Diversification Opportunities for KB Financial and Great Portland
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBIA and Great is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Great Portland Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Portland Estates 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 Great Portland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Portland Estates has no effect on the direction of KB Financial i.e., KB Financial and Great Portland go up and down completely randomly.
Pair Corralation between KB Financial and Great Portland
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.89 times more return on investment than Great Portland. However, KB Financial Group is 1.13 times less risky than Great Portland. It trades about 0.05 of its potential returns per unit of risk. Great Portland Estates is currently generating about -0.02 per unit of risk. If you would invest 3,340 in KB Financial Group on September 12, 2024 and sell it today you would earn a total of 2,110 from holding KB Financial Group or generate 63.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Great Portland Estates
Performance |
| Timeline |
| KB Financial Group |
| Great Portland Estates |
KB Financial and Great Portland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Great Portland
The main advantage of trading using opposite KB Financial and Great Portland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Great Portland 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 Great Portland will offset losses from the drop in Great Portland'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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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