Correlation Between KB Financial and MONEYSUPERMARKET

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

Diversification Opportunities for KB Financial and MONEYSUPERMARKET

-0.49

Correlation Coefficient

KB Financial  MONEYSUPERMARKET

Very good diversification

The 3 months correlation between KBIA and MONEYSUPERMARKET is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and MONEYSUPERMARKET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONEYSUPERMARKET 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 MONEYSUPERMARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONEYSUPERMARKET has no effect on the direction of KB Financial i.e., KB Financial and MONEYSUPERMARKET go up and down completely randomly.

Pair Corralation between KB Financial and MONEYSUPERMARKET

Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.79 times more return on investment than MONEYSUPERMARKET. However, KB Financial is 1.79 times more volatile than MONEYSUPERMARKET. It trades about 0.03 of its potential returns per unit of risk. MONEYSUPERMARKET is currently generating about -0.09 per unit of risk. If you would invest  5,490  in KB Financial Group on September 24, 2024 and sell it today you would earn a total of  160.00  from holding KB Financial Group or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

KB Financial Group  vs.  MONEYSUPERMARKET

KB Financial Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, KB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MONEYSUPERMARKET

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MONEYSUPERMARKET has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with KB Financial and MONEYSUPERMARKET

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

The idea behind KB Financial Group and MONEYSUPERMARKET 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.