Correlation Between KB Financial and Apple

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

Diversification Opportunities for KB Financial and Apple

0.49

Correlation Coefficient

KB Financial  Apple

Very weak diversification

The 3 months correlation between K1BF34 and Apple is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of KB Financial i.e., KB Financial and Apple go up and down completely randomly.

Pair Corralation between KB Financial and Apple

Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.18 times more return on investment than Apple. However, KB Financial is 1.18 times more volatile than Apple Inc. It trades about -0.08 of its potential returns per unit of risk. Apple Inc is currently generating about -0.23 per unit of risk. If you would invest  8,908  in KB Financial Group on December 24, 2024 and sell it today you would lose (938.00) from holding KB Financial Group or give up 10.53% 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.  Apple Inc

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 latest uncertain performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KB Financial and Apple

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

The idea behind KB Financial Group and Apple Inc 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.