Correlation Between KB Financial and Banner
Can any of the company-specific risk be diversified away by investing in both KB Financial and Banner 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 Banner 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 Banner, you can compare the effects of market volatilities on KB Financial and Banner 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 Banner. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and Banner.
Diversification Opportunities for KB Financial and Banner
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KB Financial and Banner is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Banner in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banner 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 Banner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banner has no effect on the direction of KB Financial i.e., KB Financial and Banner go up and down completely randomly.
Pair Corralation between KB Financial and Banner
Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.71 times more return on investment than Banner. However, KB Financial is 1.71 times more volatile than Banner. It trades about 0.23 of its potential returns per unit of risk. Banner is currently generating about 0.07 per unit of risk. If you would invest 6,116 in KB Financial Group on April 29, 2025 and sell it today you would earn a total of 2,475 from holding KB Financial Group or generate 40.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KB Financial Group vs. Banner
Performance |
Timeline |
KB Financial Group |
Banner |
KB Financial and Banner Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KB Financial and Banner
The main advantage of trading using opposite KB Financial and Banner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Banner 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 Banner will offset losses from the drop in Banner's long position.KB Financial vs. Shinhan Financial Group | KB Financial vs. Woori Financial Group | KB Financial vs. Korea Electric Power | KB Financial vs. Orix Corp Ads |
Banner vs. BancFirst | Banner vs. City Holding | Banner vs. Columbia Banking System | Banner vs. CVB Financial |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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