Correlation Between Mizuho Financial and KB Financial
Can any of the company-specific risk be diversified away by investing in both Mizuho Financial and KB Financial 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 Mizuho Financial and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mizuho Financial Group and KB Financial Group, you can compare the effects of market volatilities on Mizuho Financial and KB Financial 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 Mizuho Financial with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mizuho Financial and KB Financial.
Diversification Opportunities for Mizuho Financial and KB Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mizuho and KBIA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mizuho Financial Group and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group and Mizuho 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 Mizuho Financial Group are associated (or correlated) with KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of Mizuho Financial i.e., Mizuho Financial and KB Financial go up and down completely randomly.
Pair Corralation between Mizuho Financial and KB Financial
Assuming the 90 days trading horizon Mizuho Financial Group is expected to generate 0.79 times more return on investment than KB Financial. However, Mizuho Financial Group is 1.26 times less risky than KB Financial. It trades about 0.4 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.09 per unit of risk. If you would invest 380.00 in Mizuho Financial Group on August 31, 2024 and sell it today you would earn a total of 74.00 from holding Mizuho Financial Group or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mizuho Financial Group vs. KB Financial Group
Performance |
| Timeline |
| Mizuho Financial |
| KB Financial Group |
Mizuho Financial and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mizuho Financial and KB Financial
The main advantage of trading using opposite Mizuho Financial and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mizuho Financial position performs unexpectedly, KB Financial 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 KB Financial will offset losses from the drop in KB Financial's long position.| Mizuho Financial vs. China Merchants Bank | Mizuho Financial vs. PT Bank Central | Mizuho Financial vs. State Bank of | Mizuho Financial vs. PT Bank Rakyat |
| KB Financial vs. China Merchants Bank | KB Financial vs. PT Bank Central | KB Financial vs. State Bank of | KB Financial vs. PT Bank Rakyat |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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