Correlation Between KB Financial and John Bean
Can any of the company-specific risk be diversified away by investing in both KB Financial and John Bean 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 John Bean 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 John Bean Technologies, you can compare the effects of market volatilities on KB Financial and John Bean 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 John Bean. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and John Bean.
Diversification Opportunities for KB Financial and John Bean
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KBIA and John is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and John Bean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Bean Technologies 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 John Bean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Bean Technologies has no effect on the direction of KB Financial i.e., KB Financial and John Bean go up and down completely randomly.
Pair Corralation between KB Financial and John Bean
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.17 times more return on investment than John Bean. However, KB Financial is 1.17 times more volatile than John Bean Technologies. It trades about 0.09 of its potential returns per unit of risk. John Bean Technologies is currently generating about 0.04 per unit of risk. If you would invest 3,526 in KB Financial Group on September 3, 2024 and sell it today you would earn a total of 3,074 from holding KB Financial Group or generate 87.18% 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. John Bean Technologies
Performance |
| Timeline |
| KB Financial Group |
| John Bean Technologies |
KB Financial and John Bean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and John Bean
The main advantage of trading using opposite KB Financial and John Bean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, John Bean 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 John Bean will offset losses from the drop in John Bean's long position.| KB Financial vs. China Merchants Bank | KB Financial vs. PT Bank Central | KB Financial vs. DBS Group Holdings | KB Financial vs. State Bank of |
| John Bean vs. ANTA SPORTS PRODUCT | John Bean vs. WILLIS LEASE FIN | John Bean vs. Ming Le Sports | John Bean vs. USWE SPORTS AB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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