Correlation Between Settlebank and KB Financial
Can any of the company-specific risk be diversified away by investing in both Settlebank 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 Settlebank and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Settlebank and KB Financial Group, you can compare the effects of market volatilities on Settlebank 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 Settlebank with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Settlebank and KB Financial.
Diversification Opportunities for Settlebank and KB Financial
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Settlebank and 105560 is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Settlebank 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 Settlebank 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 Settlebank 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 Settlebank i.e., Settlebank and KB Financial go up and down completely randomly.
Pair Corralation between Settlebank and KB Financial
Assuming the 90 days trading horizon Settlebank is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, Settlebank is 1.03 times less risky than KB Financial. The stock trades about -0.06 of its potential returns per unit of risk. The KB Financial Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,169,227 in KB Financial Group on September 15, 2024 and sell it today you would earn a total of 330,773 from holding KB Financial Group or generate 4.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Settlebank vs. KB Financial Group
Performance |
Timeline |
Settlebank |
KB Financial Group |
Settlebank and KB Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Settlebank and KB Financial
The main advantage of trading using opposite Settlebank and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Settlebank 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.Settlebank vs. Solution Advanced Technology | Settlebank vs. Busan Industrial Co | Settlebank vs. Busan Ind | Settlebank vs. Sam Chun Dang |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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