Correlation Between KB Financial and Dime Community

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both KB Financial and Dime Community 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 Dime Community 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 Dime Community Bancshares, you can compare the effects of market volatilities on KB Financial and Dime Community 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 Dime Community. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Dime Community.

Diversification Opportunities for KB Financial and Dime Community

-0.89
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between KB Financial and Dime is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Dime Community Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dime Community Bancshares 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 Dime Community. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dime Community Bancshares has no effect on the direction of KB Financial i.e., KB Financial and Dime Community go up and down completely randomly.

Pair Corralation between KB Financial and Dime Community

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.09 times more return on investment than Dime Community. However, KB Financial is 1.09 times more volatile than Dime Community Bancshares. It trades about 0.17 of its potential returns per unit of risk. Dime Community Bancshares is currently generating about 0.09 per unit of risk. If you would invest  4,637  in KB Financial Group on December 29, 2023 and sell it today you would earn a total of  509.00  from holding KB Financial Group or generate 10.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

KB Financial Group  vs.  Dime Community Bancshares

 Performance 
       Timeline  
KB Financial Group 

Risk-Adjusted Performance

10 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, KB Financial sustained solid returns over the last few months and may actually be approaching a breakup point.
Dime Community Bancshares 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Modest
Over the last 90 days Dime Community Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

KB Financial and Dime Community Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KB Financial and Dime Community

The main advantage of trading using opposite KB Financial and Dime Community positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Dime Community 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 Dime Community will offset losses from the drop in Dime Community's long position.
The idea behind KB Financial Group and Dime Community Bancshares 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope