Correlation Between KB Financial and Cabaletta Bio

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

Diversification Opportunities for KB Financial and Cabaletta Bio

0.54

Correlation Coefficient

KB Financial  Cabaletta Bio

Very weak diversification

The 3 months correlation between KB Financial and Cabaletta is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Cabaletta Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabaletta Bio 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 Cabaletta Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabaletta Bio has no effect on the direction of KB Financial i.e., KB Financial and Cabaletta Bio go up and down completely randomly.

Pair Corralation between KB Financial and Cabaletta Bio

Allowing for the 90-day total investment horizon KB Financial is expected to generate 1.14 times less return on investment than Cabaletta Bio. But when comparing it to its historical volatility, KB Financial Group is 3.45 times less risky than Cabaletta Bio. It trades about 0.26 of its potential returns per unit of risk. Cabaletta Bio is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Cabaletta Bio on April 25, 2025 and sell it today you would earn a total of  33.00  from holding Cabaletta Bio or generate 25.98% 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.  Cabaletta Bio

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 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental drivers, KB Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Cabaletta Bio

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cabaletta Bio are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Cabaletta Bio sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and Cabaletta Bio

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

The idea behind KB Financial Group and Cabaletta Bio 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.