Correlation Between VersaBank and KB Financial
Can any of the company-specific risk be diversified away by investing in both VersaBank 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 VersaBank and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and KB Financial Group, you can compare the effects of market volatilities on VersaBank 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 VersaBank with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and KB Financial.
Diversification Opportunities for VersaBank and KB Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VersaBank and KB Financial is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank 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 VersaBank 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 VersaBank 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 VersaBank i.e., VersaBank and KB Financial go up and down completely randomly.
Pair Corralation between VersaBank and KB Financial
Given the investment horizon of 90 days VersaBank is expected to generate 1.75 times less return on investment than KB Financial. But when comparing it to its historical volatility, VersaBank is 1.09 times less risky than KB Financial. It trades about 0.05 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,573 in KB Financial Group on November 9, 2024 and sell it today you would earn a total of 2,329 from holding KB Financial Group or generate 65.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. KB Financial Group
Performance |
| Timeline |
| VersaBank |
| KB Financial Group |
VersaBank and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and KB Financial
The main advantage of trading using opposite VersaBank and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank 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.| VersaBank vs. Mountain Commerce Bancorp | VersaBank vs. American Riviera Bank | VersaBank vs. Home Federal Bancorp | VersaBank vs. Village Bank and |
| KB Financial vs. Shinhan Financial Group | KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |