Correlation Between KB Financial and US FOODS
Can any of the company-specific risk be diversified away by investing in both KB Financial and US FOODS 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 US FOODS 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 US FOODS HOLDING, you can compare the effects of market volatilities on KB Financial and US FOODS 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 US FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and US FOODS.
Diversification Opportunities for KB Financial and US FOODS
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KBIA and UFH is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and US FOODS HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US FOODS HOLDING 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 US FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US FOODS HOLDING has no effect on the direction of KB Financial i.e., KB Financial and US FOODS go up and down completely randomly.
Pair Corralation between KB Financial and US FOODS
Assuming the 90 days trading horizon KB Financial is expected to generate 1.86 times less return on investment than US FOODS. In addition to that, KB Financial is 1.42 times more volatile than US FOODS HOLDING. It trades about 0.17 of its total potential returns per unit of risk. US FOODS HOLDING is currently generating about 0.45 per unit of volatility. If you would invest 5,650 in US FOODS HOLDING on September 2, 2024 and sell it today you would earn a total of 1,050 from holding US FOODS HOLDING or generate 18.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. US FOODS HOLDING
Performance |
| Timeline |
| KB Financial Group |
| US FOODS HOLDING |
KB Financial and US FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and US FOODS
The main advantage of trading using opposite KB Financial and US FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, US FOODS 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 US FOODS will offset losses from the drop in US FOODS's long position.| KB Financial vs. The Trade Desk | KB Financial vs. FLOW TRADERS LTD | KB Financial vs. Ultra Clean Holdings | KB Financial vs. Auto Trader Group |
| US FOODS vs. OAKTRSPECLENDNEW | US FOODS vs. Regions Financial | US FOODS vs. Cardinal Health | US FOODS vs. Bausch Health Companies |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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