Correlation Between ORIX and KB Financial
Can any of the company-specific risk be diversified away by investing in both ORIX 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 ORIX and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and KB Financial Group, you can compare the effects of market volatilities on ORIX 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 ORIX with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and KB Financial.
Diversification Opportunities for ORIX and KB Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ORIX and KBIA is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. 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 ORIX 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 ORIX Corporation 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 ORIX i.e., ORIX and KB Financial go up and down completely randomly.
Pair Corralation between ORIX and KB Financial
Assuming the 90 days horizon ORIX Corporation is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, ORIX Corporation is 1.33 times less risky than KB Financial. The stock trades about -0.04 of its potential returns per unit of risk. The KB Financial Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,787 in KB Financial Group on August 28, 2024 and sell it today you would earn a total of 863.00 from holding KB Financial Group or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
ORIX Corp. vs. KB Financial Group
Performance |
| Timeline |
| ORIX |
| KB Financial Group |
ORIX and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and KB Financial
The main advantage of trading using opposite ORIX and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX 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.| ORIX vs. Superior Plus Corp | ORIX vs. NMI Holdings | ORIX vs. Origin Agritech | ORIX vs. SIVERS SEMICONDUCTORS AB |
| KB Financial vs. GOLD ROAD RES | KB Financial vs. ECHO INVESTMENT ZY | KB Financial vs. Air Transport Services | KB Financial vs. TITANIUM TRANSPORTGROUP |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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