Correlation Between KB Financial and Agro Capital

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

Diversification Opportunities for KB Financial and Agro Capital

-0.5

Correlation Coefficient

KB Financial  Agro Capital

Very good diversification

The 3 months correlation between KB Financial and Agro is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Agro Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Capital Management 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 Agro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Capital Management has no effect on the direction of KB Financial i.e., KB Financial and Agro Capital go up and down completely randomly.

Pair Corralation between KB Financial and Agro Capital

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.96 times more return on investment than Agro Capital. However, KB Financial Group is 1.05 times less risky than Agro Capital. It trades about 0.27 of its potential returns per unit of risk. Agro Capital Management is currently generating about -0.14 per unit of risk. If you would invest  5,724  in KB Financial Group on April 20, 2025 and sell it today you would earn a total of  2,550  from holding KB Financial Group or generate 44.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

KB Financial Group  vs.  Agro Capital Management

KB Financial Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, KB Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Agro Capital Management

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agro Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with KB Financial and Agro Capital

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

The idea behind KB Financial Group and Agro Capital Management 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 CEOs Directory module to screen CEOs from public companies around the world.