Correlation Between KB Financial and British Land

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

Diversification Opportunities for KB Financial and British Land

-0.52

Correlation Coefficient

KB Financial  British Land

Excellent diversification

The 3 months correlation between KB Financial and British is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and British Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British Land 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 British Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British Land has no effect on the direction of KB Financial i.e., KB Financial and British Land go up and down completely randomly.

Pair Corralation between KB Financial and British Land

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.16 times more return on investment than British Land. However, KB Financial is 1.16 times more volatile than British Land. It trades about 0.15 of its potential returns per unit of risk. British Land is currently generating about -0.23 per unit of risk. If you would invest  6,175  in KB Financial Group on August 30, 2024 and sell it today you would earn a total of  904.00  from holding KB Financial Group or generate 14.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

KB Financial Group  vs.  British Land

KB Financial Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, KB Financial may actually be approaching a critical reversion point that can send shares even higher in December 2024.

British Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days British Land has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with KB Financial and British Land

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

The idea behind KB Financial Group and British Land 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.