Correlation Between KB Financial and IsoRay

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

Diversification Opportunities for KB Financial and IsoRay

-0.71

Correlation Coefficient

KB Financial  IsoRay

Pay attention - limited upside

The 3 months correlation between KB Financial and IsoRay is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and IsoRay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IsoRay Inc 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 IsoRay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IsoRay Inc has no effect on the direction of KB Financial i.e., KB Financial and IsoRay go up and down completely randomly.

Pair Corralation between KB Financial and IsoRay

If you would invest  38.00  in IsoRay Inc on September 29, 2024 and sell it today you would earn a total of  0.00  from holding IsoRay Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

KB Financial Group  vs.  IsoRay Inc

KB Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KB Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, KB Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

IsoRay Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IsoRay Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, IsoRay is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with KB Financial and IsoRay

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

The idea behind KB Financial Group and IsoRay Inc 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.