Correlation Between KB Financial and Woori Financial

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

Diversification Opportunities for KB Financial and Woori Financial

0.93

Correlation Coefficient

KB Financial  Woori Financial

Almost no diversification

The 3 months correlation between KB Financial and Woori is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group 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 Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of KB Financial i.e., KB Financial and Woori Financial go up and down completely randomly.

Pair Corralation between KB Financial and Woori Financial

Allowing for the 90-day total investment horizon KB Financial is expected to generate 1.2 times less return on investment than Woori Financial. In addition to that, KB Financial is 1.22 times more volatile than Woori Financial Group. It trades about 0.23 of its total potential returns per unit of risk. Woori Financial Group is currently generating about 0.34 per unit of volatility. If you would invest  3,610  in Woori Financial Group on April 29, 2025 and sell it today you would earn a total of  1,863  from holding Woori Financial Group or generate 51.61% 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.  Woori Financial Group

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 18 (%) 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.

Woori Financial Group

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Woori Financial Group are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Woori Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and Woori Financial

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

The idea behind KB Financial Group and Woori Financial Group 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.