Correlation Between KB Financial and XAAR PLC
Can any of the company-specific risk be diversified away by investing in both KB Financial and XAAR PLC 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 XAAR PLC 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 XAAR PLC LS 10, you can compare the effects of market volatilities on KB Financial and XAAR PLC 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 XAAR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and XAAR PLC.
Diversification Opportunities for KB Financial and XAAR PLC
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBIA and XAAR is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and XAAR PLC LS 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XAAR PLC LS 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 XAAR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XAAR PLC LS has no effect on the direction of KB Financial i.e., KB Financial and XAAR PLC go up and down completely randomly.
Pair Corralation between KB Financial and XAAR PLC
Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.18 times more return on investment than XAAR PLC. However, KB Financial is 1.18 times more volatile than XAAR PLC LS 10. It trades about 0.0 of its potential returns per unit of risk. XAAR PLC LS 10 is currently generating about -0.42 per unit of risk. If you would invest 6,550 in KB Financial Group on August 28, 2024 and sell it today you would lose (50.00) from holding KB Financial Group or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. XAAR PLC LS 10
Performance |
| Timeline |
| KB Financial Group |
| XAAR PLC LS |
KB Financial and XAAR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and XAAR PLC
The main advantage of trading using opposite KB Financial and XAAR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, XAAR PLC 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 XAAR PLC will offset losses from the drop in XAAR PLC's long position.| KB Financial vs. GOLD ROAD RES | KB Financial vs. ECHO INVESTMENT ZY | KB Financial vs. Air Transport Services | KB Financial vs. TITANIUM TRANSPORTGROUP |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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