Correlation Between KB Financial and LOANDEPOT INC

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

Diversification Opportunities for KB Financial and LOANDEPOT INC

0.0

Correlation Coefficient

KB Financial  LOANDEPOT INC

Pay attention - limited upside

The 3 months correlation between KBIA and LOANDEPOT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of KB Financial i.e., KB Financial and LOANDEPOT INC go up and down completely randomly.

Pair Corralation between KB Financial and LOANDEPOT INC

Assuming the 90 days trading horizon KB Financial Group is expected to under-perform the LOANDEPOT INC. But the stock apears to be less risky and, when comparing its historical volatility, KB Financial Group is 1.78 times less risky than LOANDEPOT INC. The stock trades about -0.01 of its potential returns per unit of risk. The LOANDEPOT INC A is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  195.00  in LOANDEPOT INC A on October 7, 2024 and sell it today you would lose (14.00) from holding LOANDEPOT INC A or give up 7.18% of portfolio value over 90 days.

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

KB Financial Group  vs.  LOANDEPOT INC A

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 nearly stable forward indicators, KB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

LOANDEPOT INC A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LOANDEPOT INC A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, LOANDEPOT INC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KB Financial and LOANDEPOT INC

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

The idea behind KB Financial Group and LOANDEPOT INC A 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.