Correlation Between Apartment Investment and KB Financial

Can any of the company-specific risk be diversified away by investing in both Apartment Investment 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 Apartment Investment and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apartment Investment and and KB Financial Group, you can compare the effects of market volatilities on Apartment Investment 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 Apartment Investment with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apartment Investment and KB Financial.

Diversification Opportunities for Apartment Investment and KB Financial

0.15

Correlation Coefficient

Apartment Investment  KB Financial

Average diversification

The 3 months correlation between Apartment and K1BF34 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apartment Investment and 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 Apartment Investment 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 Apartment Investment and 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 Apartment Investment i.e., Apartment Investment and KB Financial go up and down completely randomly.

Pair Corralation between Apartment Investment and KB Financial

Assuming the 90 days trading horizon Apartment Investment and is expected to generate 1.07 times more return on investment than KB Financial. However, Apartment Investment is 1.07 times more volatile than KB Financial Group. It trades about 0.15 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.08 per unit of risk. If you would invest  4,890  in Apartment Investment and on October 6, 2024 and sell it today you would earn a total of  696.00  from holding Apartment Investment and or generate 14.23% return on investment over 90 days.

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

Apartment Investment and  vs.  KB Financial Group

Apartment Investment and

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apartment Investment and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain forward indicators, Apartment Investment sustained solid returns over the last few months and may actually be approaching a breakup point.

KB Financial Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, KB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Apartment Investment and KB Financial

The main advantage of trading using opposite Apartment Investment and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apartment Investment 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.

The idea behind Apartment Investment and and KB Financial Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.