Correlation Between KB Financial and First Horizon

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

Diversification Opportunities for KB Financial and First Horizon

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between KB Financial and First is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and First Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Horizon 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 First Horizon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Horizon has no effect on the direction of KB Financial i.e., KB Financial and First Horizon go up and down completely randomly.

Pair Corralation between KB Financial and First Horizon

Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the First Horizon. In addition to that, KB Financial is 2.78 times more volatile than First Horizon. It trades about -0.03 of its total potential returns per unit of risk. First Horizon is currently generating about 0.0 per unit of volatility. If you would invest  2,515  in First Horizon on October 11, 2024 and sell it today you would earn a total of  0.00  from holding First Horizon or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

KB Financial Group  vs.  First Horizon

 Performance 
       Timeline  
KB Financial Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
First Horizon 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in First Horizon are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, First Horizon is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

KB Financial and First Horizon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KB Financial and First Horizon

The main advantage of trading using opposite KB Financial and First Horizon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, First Horizon 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 First Horizon will offset losses from the drop in First Horizon's long position.
The idea behind KB Financial Group and First Horizon 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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