Correlation Between KB Financial and Enterprise Financial

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

Diversification Opportunities for KB Financial and Enterprise Financial

0.83

Correlation Coefficient

KB Financial  Enterprise Financial

Very poor diversification

The 3 months correlation between KB Financial and Enterprise is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Enterprise Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Financial 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 Enterprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Financial has no effect on the direction of KB Financial i.e., KB Financial and Enterprise Financial go up and down completely randomly.

Pair Corralation between KB Financial and Enterprise Financial

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.77 times more return on investment than Enterprise Financial. However, KB Financial is 1.77 times more volatile than Enterprise Financial Services. It trades about 0.24 of its potential returns per unit of risk. Enterprise Financial Services is currently generating about 0.11 per unit of risk. If you would invest  6,034  in KB Financial Group on April 27, 2025 and sell it today you would earn a total of  2,557  from holding KB Financial Group or generate 42.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

KB Financial Group  vs.  Enterprise Financial Services

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 18 (%) 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.

Enterprise Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enterprise Financial Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Enterprise Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with KB Financial and Enterprise Financial

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

The idea behind KB Financial Group and Enterprise Financial Services 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.