Correlation Between BankUnited and KB Financial
Can any of the company-specific risk be diversified away by investing in both BankUnited and KB Financial 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 BankUnited and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BankUnited and KB Financial Group, you can compare the effects of market volatilities on BankUnited and KB Financial 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 BankUnited with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BankUnited and KB Financial.
Diversification Opportunities for BankUnited and KB Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BankUnited and KB Financial is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BankUnited and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group and BankUnited 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 BankUnited are associated (or correlated) with KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of BankUnited i.e., BankUnited and KB Financial go up and down completely randomly.
Pair Corralation between BankUnited and KB Financial
Considering the 90-day investment horizon BankUnited is expected to generate 0.77 times more return on investment than KB Financial. However, BankUnited is 1.31 times less risky than KB Financial. It trades about 0.08 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.04 per unit of risk. If you would invest 2,723 in BankUnited on February 7, 2024 and sell it today you would earn a total of 170.00 from holding BankUnited or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BankUnited vs. KB Financial Group
Performance |
| Timeline |
| BankUnited |
| KB Financial Group |
BankUnited and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BankUnited and KB Financial
The main advantage of trading using opposite BankUnited and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BankUnited position performs unexpectedly, KB Financial 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 KB Financial will offset losses from the drop in KB Financial's long position.| BankUnited vs. Northfield Bancorp | BankUnited vs. FNB Inc | BankUnited vs. Mifflinburg Bancorp | BankUnited vs. Commercial National Financial |
| KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads | KB Financial vs. SK Telecom Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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