Correlation Between KB Financial and Saratoga Investment

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

Diversification Opportunities for KB Financial and Saratoga Investment

0.92

Correlation Coefficient

KB Financial  Saratoga Investment

Almost no diversification

The 3 months correlation between KB Financial and Saratoga is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp 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 Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of KB Financial i.e., KB Financial and Saratoga Investment go up and down completely randomly.

Pair Corralation between KB Financial and Saratoga Investment

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 9.63 times more return on investment than Saratoga Investment. However, KB Financial is 9.63 times more volatile than Saratoga Investment Corp. It trades about 0.29 of its potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.12 per unit of risk. If you would invest  5,992  in KB Financial Group on April 25, 2025 and sell it today you would earn a total of  3,044  from holding KB Financial Group or generate 50.8% return on investment over 90 days.

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

KB Financial Group  vs.  Saratoga Investment Corp

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

Saratoga Investment Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Saratoga Investment Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Saratoga Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KB Financial and Saratoga Investment

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

The idea behind KB Financial Group and Saratoga Investment Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.