Correlation Between KB Financial and LendingTree
Can any of the company-specific risk be diversified away by investing in both KB Financial and LendingTree 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 LendingTree 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 LendingTree, you can compare the effects of market volatilities on KB Financial and LendingTree 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 LendingTree. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and LendingTree.
Diversification Opportunities for KB Financial and LendingTree
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KBIA and LendingTree is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and LendingTree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LendingTree 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 LendingTree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LendingTree has no effect on the direction of KB Financial i.e., KB Financial and LendingTree go up and down completely randomly.
Pair Corralation between KB Financial and LendingTree
Assuming the 90 days trading horizon KB Financial Group is expected to generate 0.44 times more return on investment than LendingTree. However, KB Financial Group is 2.27 times less risky than LendingTree. It trades about 0.08 of its potential returns per unit of risk. LendingTree is currently generating about -0.09 per unit of risk. If you would invest 6,400 in KB Financial Group on August 30, 2024 and sell it today you would earn a total of 250.00 from holding KB Financial Group or generate 3.91% 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. LendingTree
Performance |
| Timeline |
| KB Financial Group |
| LendingTree |
KB Financial and LendingTree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and LendingTree
The main advantage of trading using opposite KB Financial and LendingTree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, LendingTree 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 LendingTree will offset losses from the drop in LendingTree's long position.| KB Financial vs. Playa Hotels Resorts | KB Financial vs. CDL INVESTMENT | KB Financial vs. ECHO INVESTMENT ZY | KB Financial vs. Ming Le Sports |
| LendingTree vs. DATANG INTL POW | LendingTree vs. NTT DATA | LendingTree vs. Sumitomo Mitsui Construction | LendingTree vs. North American Construction |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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