Correlation Between KB Financial and Sims Metal

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

Diversification Opportunities for KB Financial and Sims Metal

0.65

Correlation Coefficient

KB Financial  Sims Metal

Poor diversification

The 3 months correlation between KB Financial and Sims is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Sims Metal Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims Metal Management 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 Sims Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims Metal Management has no effect on the direction of KB Financial i.e., KB Financial and Sims Metal go up and down completely randomly.

Pair Corralation between KB Financial and Sims Metal

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 0.92 times more return on investment than Sims Metal. However, KB Financial Group is 1.08 times less risky than Sims Metal. It trades about 0.08 of its potential returns per unit of risk. Sims Metal Management is currently generating about 0.04 per unit of risk. If you would invest  3,605  in KB Financial Group on September 25, 2025 and sell it today you would earn a total of  4,960  from holding KB Financial Group or generate 137.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	77.98%
Values	Daily Returns

KB Financial Group  vs.  Sims Metal Management

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 unsteady fundamental drivers, KB Financial may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Sims Metal Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sims Metal Management are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Sims Metal showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and Sims Metal

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

The idea behind KB Financial Group and Sims Metal Management 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.