Correlation Between CDL INVESTMENT and KB Financial

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

Diversification Opportunities for CDL INVESTMENT and KB Financial

-0.28

Correlation Coefficient

CDL INVESTMENT  KB Financial

Very good diversification

The 3 months correlation between CDL and KBIA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT 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 CDL 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 CDL INVESTMENT 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 CDL INVESTMENT i.e., CDL INVESTMENT and KB Financial go up and down completely randomly.

Pair Corralation between CDL INVESTMENT and KB Financial

Assuming the 90 days trading horizon CDL INVESTMENT is expected to under-perform the KB Financial. But the stock apears to be less risky and, when comparing its historical volatility, CDL INVESTMENT is 1.23 times less risky than KB Financial. The stock trades about 0.0 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  5,787  in KB Financial Group on August 30, 2024 and sell it today you would earn a total of  863.00  from holding KB Financial Group or generate 14.91% return on investment over 90 days.

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

CDL INVESTMENT  vs.  KB Financial Group

CDL INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CDL INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, CDL INVESTMENT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

KB Financial Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, KB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CDL INVESTMENT and KB Financial

The main advantage of trading using opposite CDL INVESTMENT and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL 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 CDL INVESTMENT 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.