Correlation Between KB Financial and Pan Pacific
Can any of the company-specific risk be diversified away by investing in both KB Financial and Pan Pacific 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 Pan Pacific 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 Pan Pacific International, you can compare the effects of market volatilities on KB Financial and Pan Pacific 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 Pan Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Pan Pacific.
Diversification Opportunities for KB Financial and Pan Pacific
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBIA and Pan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Pan Pacific International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Pacific International 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 Pan Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Pacific International has no effect on the direction of KB Financial i.e., KB Financial and Pan Pacific go up and down completely randomly.
Pair Corralation between KB Financial and Pan Pacific
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.31 times more return on investment than Pan Pacific. However, KB Financial is 1.31 times more volatile than Pan Pacific International. It trades about 0.19 of its potential returns per unit of risk. Pan Pacific International is currently generating about 0.12 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Pan Pacific International
Performance |
| Timeline |
| KB Financial Group |
| Pan Pacific International |
KB Financial and Pan Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Pan Pacific
The main advantage of trading using opposite KB Financial and Pan Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Pan Pacific 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 Pan Pacific will offset losses from the drop in Pan Pacific'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 |
| Pan Pacific vs. Unity Software | Pan Pacific vs. SPORT LISBOA E | Pan Pacific vs. Alfa Financial Software | Pan Pacific vs. Sqs Software Quality |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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