Correlation Between KB Financial and Eagle Bancorp
Can any of the company-specific risk be diversified away by investing in both KB Financial and Eagle Bancorp 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 Eagle Bancorp 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 Eagle Bancorp Montana, you can compare the effects of market volatilities on KB Financial and Eagle Bancorp 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 Eagle Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Eagle Bancorp.
Diversification Opportunities for KB Financial and Eagle Bancorp
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KB Financial and Eagle is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Eagle Bancorp Montana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Bancorp Montana 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 Eagle Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Bancorp Montana has no effect on the direction of KB Financial i.e., KB Financial and Eagle Bancorp go up and down completely randomly.
Pair Corralation between KB Financial and Eagle Bancorp
Allowing for the 90-day total investment horizon KB Financial Group is expected to under-perform the Eagle Bancorp. In addition to that, KB Financial is 2.45 times more volatile than Eagle Bancorp Montana. It trades about -0.47 of its total potential returns per unit of risk. Eagle Bancorp Montana is currently generating about -0.21 per unit of volatility. If you would invest 1,285 in Eagle Bancorp Montana on January 20, 2024 and sell it today you would lose (46.00) from holding Eagle Bancorp Montana or give up 3.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. Eagle Bancorp Montana
Performance |
| Timeline |
| KB Financial Group |
| Eagle Bancorp Montana |
KB Financial and Eagle Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and Eagle Bancorp
The main advantage of trading using opposite KB Financial and Eagle Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Eagle Bancorp 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 Eagle Bancorp will offset losses from the drop in Eagle Bancorp's long position.| KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares | KB Financial vs. Grupo Aval |
| Eagle Bancorp vs. Home Bancorp | Eagle Bancorp vs. Heritage Financial | Eagle Bancorp vs. Lake Shore Bancorp |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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