Correlation Between Omeros and KB HOME
Can any of the company-specific risk be diversified away by investing in both Omeros and KB HOME 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 Omeros and KB HOME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omeros and KB HOME, you can compare the effects of market volatilities on Omeros and KB HOME 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 Omeros with a short position of KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omeros and KB HOME.
Diversification Opportunities for Omeros and KB HOME
Weak diversification
The 3 months correlation between Omeros and KBH is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Omeros and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME and Omeros 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 Omeros are associated (or correlated) with KB HOME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB HOME has no effect on the direction of Omeros i.e., Omeros and KB HOME go up and down completely randomly.
Pair Corralation between Omeros and KB HOME
Assuming the 90 days horizon Omeros is expected to generate 10.35 times more return on investment than KB HOME. However, Omeros is 10.35 times more volatile than KB HOME. It trades about 0.36 of its potential returns per unit of risk. KB HOME is currently generating about 0.24 per unit of risk. If you would invest 385.00 in Omeros on August 31, 2024 and sell it today you would earn a total of 730.00 from holding Omeros or generate 189.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omeros vs. KB HOME
Performance |
| Timeline |
| Omeros |
| KB HOME |
Omeros and KB HOME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omeros and KB HOME
The main advantage of trading using opposite Omeros and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omeros position performs unexpectedly, KB HOME 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 HOME will offset losses from the drop in KB HOME's long position.| Omeros vs. VIRGIN WINES UK | Omeros vs. MI Homes | Omeros vs. CENTURIA OFFICE REIT | Omeros vs. Addus HomeCare |
| KB HOME vs. ASURE SOFTWARE | KB HOME vs. BJs Wholesale Club | KB HOME vs. NXP Semiconductors NV | KB HOME vs. JIAHUA STORES |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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