Correlation Between KB Financial and Keyera Corp
Can any of the company-specific risk be diversified away by investing in both KB Financial and Keyera Corp 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 Keyera Corp 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 Keyera Corp, you can compare the effects of market volatilities on KB Financial and Keyera Corp 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 Keyera Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Keyera Corp.
Diversification Opportunities for KB Financial and Keyera Corp
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KBIA and Keyera is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Keyera Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyera Corp 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 Keyera Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyera Corp has no effect on the direction of KB Financial i.e., KB Financial and Keyera Corp go up and down completely randomly.
Pair Corralation between KB Financial and Keyera Corp
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.96 times more return on investment than Keyera Corp. However, KB Financial Group is 1.05 times less risky than Keyera Corp. It trades about -0.1 of its potential returns per unit of risk. Keyera Corp is currently generating about -0.11 per unit of risk. If you would invest 4,960 in KB Financial Group on January 13, 2025 and sell it today you would lose (420.00) from holding KB Financial Group or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Keyera Corp
Performance |
| Timeline |
| KB Financial Group |
| Keyera Corp |
KB Financial and Keyera Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Keyera Corp
The main advantage of trading using opposite KB Financial and Keyera Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Keyera Corp 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 Keyera Corp will offset losses from the drop in Keyera Corp's long position.| KB Financial vs. SINGAPORE AIRLINES | KB Financial vs. ALBIS LEASING AG | KB Financial vs. Southwest Airlines Co | KB Financial vs. BOS BETTER ONLINE |
| Keyera Corp vs. Penta Ocean Construction Co | Keyera Corp vs. Treasury Wine Estates | Keyera Corp vs. Mitsui Chemicals | Keyera Corp vs. CanSino Biologics |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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