Correlation Between KB Financial and Kubota
Can any of the company-specific risk be diversified away by investing in both KB Financial and Kubota 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 Kubota 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 Kubota, you can compare the effects of market volatilities on KB Financial and Kubota 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 Kubota. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Kubota.
Diversification Opportunities for KB Financial and Kubota
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KBIA and Kubota is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Kubota in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kubota 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 Kubota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kubota has no effect on the direction of KB Financial i.e., KB Financial and Kubota go up and down completely randomly.
Pair Corralation between KB Financial and Kubota
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.49 times more return on investment than Kubota. However, KB Financial is 1.49 times more volatile than Kubota. It trades about 0.19 of its potential returns per unit of risk. Kubota is currently generating about 0.0 per unit of risk. If you would invest 6,000 in KB Financial Group on September 3, 2024 and sell it today you would earn a total of 600.00 from holding KB Financial Group or generate 10.0% 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. Kubota
Performance |
| Timeline |
| KB Financial Group |
| Kubota |
KB Financial and Kubota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Kubota
The main advantage of trading using opposite KB Financial and Kubota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Kubota 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 Kubota will offset losses from the drop in Kubota'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 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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