Correlation Between KB Financial and Chunbo

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

Diversification Opportunities for KB Financial and Chunbo

0.54

Correlation Coefficient

KB Financial  Chunbo

Very weak diversification

The 3 months correlation between 105560 and Chunbo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Chunbo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunbo 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 Chunbo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunbo has no effect on the direction of KB Financial i.e., KB Financial and Chunbo go up and down completely randomly.

Pair Corralation between KB Financial and Chunbo

Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the Chunbo. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.36 times less risky than Chunbo. The stock trades about -0.21 of its potential returns per unit of risk. The Chunbo Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,055,000  in Chunbo Co on November 20, 2024 and sell it today you would lose (45,000) from holding Chunbo Co or give up 1.11% of portfolio value over 90 days.

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

KB Financial Group  vs.  Chunbo Co

KB Financial Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days KB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Chunbo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chunbo Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Chunbo is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KB Financial and Chunbo

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

The idea behind KB Financial Group and Chunbo Co 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.