Correlation Between COLUMBIA SPORTSWEAR and KB Financial

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

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

Diversification Opportunities for COLUMBIA SPORTSWEAR and KB Financial

0.02

Correlation Coefficient

COLUMBIA SPORTSWEAR  KB Financial

Significant diversification

The 3 months correlation between COLUMBIA and KBIA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR i.e., COLUMBIA SPORTSWEAR and KB Financial go up and down completely randomly.

Pair Corralation between COLUMBIA SPORTSWEAR and KB Financial

Assuming the 90 days trading horizon COLUMBIA SPORTSWEAR is expected to generate 4.95 times less return on investment than KB Financial. But when comparing it to its historical volatility, COLUMBIA SPORTSWEAR is 1.55 times less risky than KB Financial. It trades about 0.02 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3,153  in KB Financial Group on December 4, 2024 and sell it today you would earn a total of  2,047  from holding KB Financial Group or generate 64.92% return on investment over 90 days.

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

COLUMBIA SPORTSWEAR  vs.  KB Financial Group

COLUMBIA SPORTSWEAR

Risk-Adjusted Performance

Very Weak

Over the last 90 days COLUMBIA SPORTSWEAR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, COLUMBIA SPORTSWEAR is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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 fragile performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with COLUMBIA SPORTSWEAR and KB Financial

The main advantage of trading using opposite COLUMBIA SPORTSWEAR and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.