Correlation Between KB Financial and NiSource

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

Diversification Opportunities for KB Financial and NiSource

-0.29

Correlation Coefficient

KB Financial  NiSource

Very good diversification

The 3 months correlation between KBIA and NiSource is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and NiSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NiSource 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 NiSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NiSource has no effect on the direction of KB Financial i.e., KB Financial and NiSource go up and down completely randomly.

Pair Corralation between KB Financial and NiSource

Assuming the 90 days trading horizon KB Financial Group is expected to generate 1.82 times more return on investment than NiSource. However, KB Financial is 1.82 times more volatile than NiSource. It trades about 0.21 of its potential returns per unit of risk. NiSource is currently generating about 0.04 per unit of risk. If you would invest  5,298  in KB Financial Group on April 25, 2025 and sell it today you would earn a total of  1,702  from holding KB Financial Group or generate 32.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KB Financial Group  vs.  NiSource

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 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward indicators, KB Financial reported solid returns over the last few months and may actually be approaching a breakup point.

NiSource

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NiSource are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, NiSource is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KB Financial and NiSource

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

The idea behind KB Financial Group and NiSource 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.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.