Correlation Between Invesco Global and KB Financial
Can any of the company-specific risk be diversified away by investing in both Invesco Global 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 Invesco Global and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Global Clean and KB Financial Group, you can compare the effects of market volatilities on Invesco Global 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 Invesco Global with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and KB Financial.
Diversification Opportunities for Invesco Global and KB Financial
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and KB Financial is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Clean 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 Invesco Global 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 Invesco Global Clean 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 Invesco Global i.e., Invesco Global and KB Financial go up and down completely randomly.
Pair Corralation between Invesco Global and KB Financial
Considering the 90-day investment horizon Invesco Global Clean is expected to under-perform the KB Financial. But the etf apears to be less risky and, when comparing its historical volatility, Invesco Global Clean is 2.52 times less risky than KB Financial. The etf trades about -0.02 of its potential returns per unit of risk. The KB Financial Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,654 in KB Financial Group on January 25, 2024 and sell it today you would earn a total of 429.00 from holding KB Financial Group or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Global Clean vs. KB Financial Group
Performance |
| Timeline |
| Invesco Global Clean |
| KB Financial Group |
Invesco Global and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and KB Financial
The main advantage of trading using opposite Invesco Global and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global 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.| Invesco Global vs. Invesco WilderHill Clean | Invesco Global vs. First Trust Global | Invesco Global vs. First Trust NASDAQ | Invesco Global vs. ALPS Clean Energy |
| KB Financial vs. Home Bancorp | KB Financial vs. Community West Bancshares | KB Financial vs. First Community | KB Financial vs. Affinity Bancshares |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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