Correlation Between KB Financial and Grupo Financiero

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

Diversification Opportunities for KB Financial and Grupo Financiero

-0.76

Correlation Coefficient

KB Financial  Grupo Financiero

Pay attention - limited upside

The 3 months correlation between KB Financial and Grupo is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Grupo Financiero Galicia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Financiero Galicia 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 Grupo Financiero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Financiero Galicia has no effect on the direction of KB Financial i.e., KB Financial and Grupo Financiero go up and down completely randomly.

Pair Corralation between KB Financial and Grupo Financiero

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.06 times more return on investment than Grupo Financiero. However, KB Financial is 1.06 times more volatile than Grupo Financiero Galicia. It trades about 0.06 of its potential returns per unit of risk. Grupo Financiero Galicia is currently generating about -0.16 per unit of risk. If you would invest  7,358  in KB Financial Group on May 25, 2025 and sell it today you would earn a total of  625.00  from holding KB Financial Group or generate 8.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

KB Financial Group  vs.  Grupo Financiero Galicia

KB Financial Group

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, KB Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Grupo Financiero Galicia

Risk-Adjusted Performance

Weakest

Over the last 90 days Grupo Financiero Galicia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with KB Financial and Grupo Financiero

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

The idea behind KB Financial Group and Grupo Financiero Galicia 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.