Correlation Between KB Financial and General Mills
Can any of the company-specific risk be diversified away by investing in both KB Financial and General Mills 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 General Mills 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 General Mills, you can compare the effects of market volatilities on KB Financial and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and General Mills.
Diversification Opportunities for KB Financial and General Mills
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KBIA and General is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of KB Financial i.e., KB Financial and General Mills go up and down completely randomly.
Pair Corralation between KB Financial and General Mills
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.55 times more return on investment than General Mills. However, KB Financial is 1.55 times more volatile than General Mills. It trades about 0.14 of its potential returns per unit of risk. General Mills is currently generating about 0.12 per unit of risk. If you would invest 6,100 in KB Financial Group on August 26, 2024 and sell it today you would earn a total of 550.00 from holding KB Financial Group or generate 9.02% 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. General Mills
Performance |
| Timeline |
| KB Financial Group |
| General Mills |
KB Financial and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and General Mills
The main advantage of trading using opposite KB Financial and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.| KB Financial vs. Bausch Health Companies | KB Financial vs. Benchmark Electronics | KB Financial vs. Sabra Health Care | KB Financial vs. Ramsay Health Care |
| General Mills vs. Johnson Johnson | General Mills vs. Pfizer Inc | General Mills vs. Amgen Inc | General Mills vs. Bayer AG NA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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