Correlation Between KB Financial and Value Line

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

Diversification Opportunities for KB Financial and Value Line

-0.69
  Correlation Coefficient

Excellent diversification

The 3 months correlation between KB Financial and Value is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Value Line in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Line 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 Value Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Line has no effect on the direction of KB Financial i.e., KB Financial and Value Line go up and down completely randomly.

Pair Corralation between KB Financial and Value Line

Allowing for the 90-day total investment horizon KB Financial Group is expected to generate 1.11 times more return on investment than Value Line. However, KB Financial is 1.11 times more volatile than Value Line. It trades about 0.26 of its potential returns per unit of risk. Value Line is currently generating about -0.03 per unit of risk. If you would invest  5,860  in KB Financial Group on April 23, 2025 and sell it today you would earn a total of  2,435  from holding KB Financial Group or generate 41.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

KB Financial Group  vs.  Value Line

 Performance 
       Timeline  
KB Financial Group 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
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.
Value Line 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Value Line has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Value Line is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

KB Financial and Value Line Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KB Financial and Value Line

The main advantage of trading using opposite KB Financial and Value Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial position performs unexpectedly, Value Line 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 Value Line will offset losses from the drop in Value Line's long position.
The idea behind KB Financial Group and Value Line 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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