Correlation Between KB Financial and FlexiInternational

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

Diversification Opportunities for KB Financial and FlexiInternational

-0.58

Correlation Coefficient

KB Financial  FlexiInternational

Excellent diversification

The 3 months correlation between KB Financial and FlexiInternational is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and FlexiInternational Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexiInternational 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 FlexiInternational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexiInternational has no effect on the direction of KB Financial i.e., KB Financial and FlexiInternational go up and down completely randomly.

Pair Corralation between KB Financial and FlexiInternational

Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the FlexiInternational. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 3.62 times less risky than FlexiInternational. The stock trades about -0.15 of its potential returns per unit of risk. The FlexiInternational Software is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  42.00  in FlexiInternational Software on October 12, 2024 and sell it today you would earn a total of  15.00  from holding FlexiInternational Software or generate 35.71% return on investment over 90 days.

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

KB Financial Group  vs.  FlexiInternational Software

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 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.

FlexiInternational

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FlexiInternational Software are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, FlexiInternational demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and FlexiInternational

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

The idea behind KB Financial Group and FlexiInternational Software 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.