Correlation Between KB Financial and P2 Gold

Can any of the company-specific risk be diversified away by investing in both KB Financial and P2 Gold 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 P2 Gold 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 P2 Gold, you can compare the effects of market volatilities on KB Financial and P2 Gold 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 P2 Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and P2 Gold.

Diversification Opportunities for KB Financial and P2 Gold

0.82

Correlation Coefficient

KB Financial  P2 Gold

Very poor diversification

The 3 months correlation between KB Financial and PGLDF is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and P2 Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on P2 Gold 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 P2 Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of P2 Gold has no effect on the direction of KB Financial i.e., KB Financial and P2 Gold go up and down completely randomly.

Pair Corralation between KB Financial and P2 Gold

Allowing for the 90-day total investment horizon KB Financial is expected to generate 3.25 times less return on investment than P2 Gold. But when comparing it to its historical volatility, KB Financial Group is 3.05 times less risky than P2 Gold. It trades about 0.11 of its potential returns per unit of risk. P2 Gold is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6.30  in P2 Gold on May 4, 2025 and sell it today you would earn a total of  3.40  from holding P2 Gold or generate 53.97% return on investment over 90 days.

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

KB Financial Group  vs.  P2 Gold

KB Financial Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 8 (%) 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.

P2 Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in P2 Gold are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, P2 Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and P2 Gold

The main advantage of trading using opposite KB Financial and P2 Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, P2 Gold 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 P2 Gold will offset losses from the drop in P2 Gold's long position.

The idea behind KB Financial Group and P2 Gold 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.