Correlation Between KB Financial and Bionomics

Can any of the company-specific risk be diversified away by investing in both KB Financial and Bionomics 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 Bionomics 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 Bionomics Limited, you can compare the effects of market volatilities on KB Financial and Bionomics 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 Bionomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Bionomics.

Diversification Opportunities for KB Financial and Bionomics

-0.42

Correlation Coefficient

KB Financial  Bionomics

Very good diversification

The 3 months correlation between KB Financial and Bionomics is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Bionomics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bionomics Limited 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 Bionomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bionomics Limited has no effect on the direction of KB Financial i.e., KB Financial and Bionomics go up and down completely randomly.

Pair Corralation between KB Financial and Bionomics

If you would invest  6,367  in KB Financial Group on September 2, 2024 and sell it today you would earn a total of  526.00  from holding KB Financial Group or generate 8.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

KB Financial Group  vs.  Bionomics Limited

KB Financial Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, KB Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Bionomics Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bionomics Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Bionomics is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KB Financial and Bionomics

The main advantage of trading using opposite KB Financial and Bionomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Bionomics 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 Bionomics will offset losses from the drop in Bionomics' long position.

The idea behind KB Financial Group and Bionomics Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.