Correlation Between Saratoga Investment and KB Financial
Can any of the company-specific risk be diversified away by investing in both Saratoga Investment and KB 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 Saratoga Investment and KB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saratoga Investment Corp and KB Financial Group, you can compare the effects of market volatilities on Saratoga Investment and KB 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 Saratoga Investment with a short position of KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saratoga Investment and KB Financial.
Diversification Opportunities for Saratoga Investment and KB Financial
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Saratoga and KB Financial is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Saratoga Investment Corp and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group and Saratoga Investment 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 Saratoga Investment Corp are associated (or correlated) with KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of Saratoga Investment i.e., Saratoga Investment and KB Financial go up and down completely randomly.
Pair Corralation between Saratoga Investment and KB Financial
Considering the 90-day investment horizon Saratoga Investment is expected to generate 18.94 times less return on investment than KB Financial. But when comparing it to its historical volatility, Saratoga Investment Corp is 9.03 times less risky than KB Financial. It trades about 0.12 of its potential returns per unit of risk. KB Financial Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 5,992 in KB Financial Group on April 25, 2025 and sell it today you would earn a total of 2,432 from holding KB Financial Group or generate 40.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Saratoga Investment Corp vs. KB Financial Group
Performance |
Timeline |
Saratoga Investment Corp |
KB Financial Group |
Saratoga Investment and KB Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Saratoga Investment and KB Financial
The main advantage of trading using opposite Saratoga Investment and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saratoga Investment position performs unexpectedly, KB 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 KB Financial will offset losses from the drop in KB Financial's long position.Saratoga Investment vs. Wipro Limited ADR | Saratoga Investment vs. Dr Reddys Laboratories | Saratoga Investment vs. Infosys Ltd ADR | Saratoga Investment vs. ICICI Bank Limited |
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Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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