Correlation Between KB Financial and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both KB Financial and Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities Limited, you can compare the effects of market volatilities on KB Financial and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Canadian Utilities.
Diversification Opportunities for KB Financial and Canadian Utilities
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KB Financial and Canadian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of KB Financial i.e., KB Financial and Canadian Utilities go up and down completely randomly.
Pair Corralation between KB Financial and Canadian Utilities
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 7.11 times more return on investment than Canadian Utilities. However, KB Financial is 7.11 times more volatile than Canadian Utilities Limited. It trades about 0.02 of its potential returns per unit of risk. Canadian Utilities Limited is currently generating about -0.06 per unit of risk. If you would invest 4,322 in KB Financial Group on January 26, 2024 and sell it today you would earn a total of 645.00 from holding KB Financial Group or generate 14.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 82.79% |
Values | Daily Returns |
KB Financial Group vs. Canadian Utilities Limited
Performance |
Timeline |
KB Financial Group |
Canadian Utilities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KB Financial and Canadian Utilities Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and Canadian Utilities
The main advantage of trading using opposite KB Financial and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares | KB Financial vs. Credicorp |
Canadian Utilities vs. Canadian Utilities Limited | Canadian Utilities vs. Atco | Canadian Utilities vs. Black Hills | Canadian Utilities vs. ENEL Societa per |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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