Correlation Between KB Financial and Kering SA
Can any of the company-specific risk be diversified away by investing in both KB Financial and Kering SA 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 Kering SA 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 Kering SA, you can compare the effects of market volatilities on KB Financial and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Kering SA.
Diversification Opportunities for KB Financial and Kering SA
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBIA and Kering is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of KB Financial i.e., KB Financial and Kering SA go up and down completely randomly.
Pair Corralation between KB Financial and Kering SA
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.14 times more return on investment than Kering SA. However, KB Financial is 1.14 times more volatile than Kering SA. It trades about 0.07 of its potential returns per unit of risk. Kering SA is currently generating about -0.07 per unit of risk. If you would invest 3,375 in KB Financial Group on September 3, 2024 and sell it today you would earn a total of 3,225 from holding KB Financial Group or generate 95.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Kering SA
Performance |
| Timeline |
| KB Financial Group |
| Kering SA |
KB Financial and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Kering SA
The main advantage of trading using opposite KB Financial and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA'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 |
| Kering SA vs. Goosehead Insurance | Kering SA vs. CSSC Offshore Marine | Kering SA vs. LIFENET INSURANCE CO | Kering SA vs. BW OFFSHORE LTD |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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