Correlation Between KB Financial and Amarantus Bioscience

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

Diversification Opportunities for KB Financial and Amarantus Bioscience

0.2

Correlation Coefficient

KB Financial  Amarantus Bioscience

Modest diversification

The 3 months correlation between KB Financial and Amarantus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Amarantus Bioscience Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarantus Bioscience 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 Amarantus Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarantus Bioscience has no effect on the direction of KB Financial i.e., KB Financial and Amarantus Bioscience go up and down completely randomly.

Pair Corralation between KB Financial and Amarantus Bioscience

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.06 times more return on investment than Amarantus Bioscience. However, KB Financial Group is 16.38 times less risky than Amarantus Bioscience. It trades about -0.17 of its potential returns per unit of risk. Amarantus Bioscience Holdings is currently generating about -0.22 per unit of risk. If you would invest  6,028  in KB Financial Group on October 6, 2024 and sell it today you would lose (274.00) from holding KB Financial Group or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

KB Financial Group  vs.  Amarantus Bioscience Holdings

KB Financial Group

Risk-Adjusted Performance

0 of 100

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 fragile 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.

Amarantus Bioscience

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amarantus Bioscience Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, Amarantus Bioscience unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and Amarantus Bioscience

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

The idea behind KB Financial Group and Amarantus Bioscience Holdings 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.