Correlation Between KB Financial and Regal Hotels
Can any of the company-specific risk be diversified away by investing in both KB Financial and Regal Hotels 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 Regal Hotels 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 Regal Hotels International, you can compare the effects of market volatilities on KB Financial and Regal Hotels 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 Regal Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Regal Hotels.
Diversification Opportunities for KB Financial and Regal Hotels
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBIA and Regal is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Regal Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Hotels Interna 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 Regal Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Hotels Interna has no effect on the direction of KB Financial i.e., KB Financial and Regal Hotels go up and down completely randomly.
Pair Corralation between KB Financial and Regal Hotels
Assuming the 90 days trading horizon KB Financial Group is expected to generate 2.3 times more return on investment than Regal Hotels. However, KB Financial is 2.3 times more volatile than Regal Hotels International. It trades about 0.12 of its potential returns per unit of risk. Regal Hotels International is currently generating about 0.13 per unit of risk. If you would invest 6,200 in KB Financial Group on August 25, 2024 and sell it today you would earn a total of 450.00 from holding KB Financial Group or generate 7.26% 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. Regal Hotels International
Performance |
| Timeline |
| KB Financial Group |
| Regal Hotels Interna |
KB Financial and Regal Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Regal Hotels
The main advantage of trading using opposite KB Financial and Regal Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Regal Hotels 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 Regal Hotels will offset losses from the drop in Regal Hotels' long position.| KB Financial vs. HDFC Bank Limited | KB Financial vs. PT Bank Central | KB Financial vs. DBS Group Holdings | KB Financial vs. State Bank of |
| Regal Hotels vs. InterContinental Hotels Group | Regal Hotels vs. INTERCONT HOTELS | Regal Hotels vs. Accor SA | Regal Hotels vs. Choice Hotels International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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