Correlation Between KB Financial and Valneva SE

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

Diversification Opportunities for KB Financial and Valneva SE

-0.78

Correlation Coefficient

KB Financial  Valneva SE

Pay attention - limited upside

The 3 months correlation between KB Financial and Valneva is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Valneva SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valneva SE ADR 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 Valneva SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valneva SE ADR has no effect on the direction of KB Financial i.e., KB Financial and Valneva SE go up and down completely randomly.

Pair Corralation between KB Financial and Valneva SE

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.06 times more return on investment than Valneva SE. However, KB Financial is 1.06 times more volatile than Valneva SE ADR. It trades about 0.26 of its potential returns per unit of risk. Valneva SE ADR is currently generating about 0.0 per unit of risk. If you would invest  5,724  in KB Financial Group on April 21, 2025 and sell it today you would earn a total of  2,445  from holding KB Financial Group or generate 42.71% 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.  Valneva SE ADR

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 20 (%) 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.

Valneva SE ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Valneva SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Valneva SE is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with KB Financial and Valneva SE

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

The idea behind KB Financial Group and Valneva SE ADR 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 Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.