Correlation Between KB Financial and Allied Energy

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

Diversification Opportunities for KB Financial and Allied Energy

-0.6

Correlation Coefficient

KB Financial  Allied Energy

Excellent diversification

The 3 months correlation between KB Financial and Allied is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and Allied Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Energy 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 Allied Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Energy has no effect on the direction of KB Financial i.e., KB Financial and Allied Energy go up and down completely randomly.

Pair Corralation between KB Financial and Allied Energy

Allowing for the 90-day total investment horizon KB Financial is expected to generate 127.6 times less return on investment than Allied Energy. But when comparing it to its historical volatility, KB Financial Group is 17.19 times less risky than Allied Energy. It trades about 0.02 of its potential returns per unit of risk. Allied Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Allied Energy on September 17, 2025 and sell it today you would earn a total of  0.00  from holding Allied Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

KB Financial Group  vs.  Allied Energy

KB Financial Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KB Financial Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, KB Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Allied Energy

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Allied Energy are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Allied Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KB Financial and Allied Energy

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

The idea behind KB Financial Group and Allied Energy 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.