Correlation Between KB Financial and Veolia Environnement
Can any of the company-specific risk be diversified away by investing in both KB Financial and Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement SA, you can compare the effects of market volatilities on KB Financial and Veolia Environnement 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 Veolia Environnement. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Veolia Environnement.
Diversification Opportunities for KB Financial and Veolia Environnement
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBIA and Veolia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Veolia Environnement SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veolia Environnement 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 Veolia Environnement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veolia Environnement has no effect on the direction of KB Financial i.e., KB Financial and Veolia Environnement go up and down completely randomly.
Pair Corralation between KB Financial and Veolia Environnement
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.75 times more return on investment than Veolia Environnement. However, KB Financial is 1.75 times more volatile than Veolia Environnement SA. It trades about 0.09 of its potential returns per unit of risk. Veolia Environnement SA is currently generating about 0.01 per unit of risk. If you would invest 3,171 in KB Financial Group on August 31, 2024 and sell it today you would earn a total of 3,479 from holding KB Financial Group or generate 109.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
KB Financial Group vs. Veolia Environnement SA
Performance |
| Timeline |
| KB Financial Group |
| Veolia Environnement |
KB Financial and Veolia Environnement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Veolia Environnement
The main advantage of trading using opposite KB Financial and Veolia Environnement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Veolia Environnement 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 Veolia Environnement will offset losses from the drop in Veolia Environnement's long position.The idea behind KB Financial Group and Veolia Environnement SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Veolia Environnement vs. Take Two Interactive Software | Veolia Environnement vs. Columbia Sportswear | Veolia Environnement vs. SPORTING | Veolia Environnement vs. USWE SPORTS AB |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |