Correlation Between 24SEVENOFFICE GROUP and KB HOME
Can any of the company-specific risk be diversified away by investing in both 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP and KB HOME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 24SEVENOFFICE GROUP AB and KB HOME, you can compare the effects of market volatilities on 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP with a short position of KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of 24SEVENOFFICE GROUP and KB HOME.
Diversification Opportunities for 24SEVENOFFICE GROUP and KB HOME
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 24SEVENOFFICE and KBH is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding 24SEVENOFFICE GROUP AB and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP AB 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 24SEVENOFFICE GROUP i.e., 24SEVENOFFICE GROUP and KB HOME go up and down completely randomly.
Pair Corralation between 24SEVENOFFICE GROUP and KB HOME
Assuming the 90 days horizon 24SEVENOFFICE GROUP AB is expected to under-perform the KB HOME. But the stock apears to be less risky and, when comparing its historical volatility, 24SEVENOFFICE GROUP AB is 2.02 times less risky than KB HOME. The stock trades about -0.14 of its potential returns per unit of risk. The KB HOME is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7,375 in KB HOME on August 29, 2024 and sell it today you would earn a total of 475.00 from holding KB HOME or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
24SEVENOFFICE GROUP AB vs. KB HOME
Performance |
| Timeline |
| 24SEVENOFFICE GROUP |
| KB HOME |
24SEVENOFFICE GROUP and KB HOME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 24SEVENOFFICE GROUP and KB HOME
The main advantage of trading using opposite 24SEVENOFFICE GROUP and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 24SEVENOFFICE GROUP 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.| 24SEVENOFFICE GROUP vs. Salesforce | 24SEVENOFFICE GROUP vs. SAP SE | 24SEVENOFFICE GROUP vs. Workiva | 24SEVENOFFICE GROUP vs. Fastly Inc |
| KB HOME vs. Apple Inc | KB HOME vs. Apple Inc | KB HOME vs. Superior Plus Corp | KB HOME vs. SIVERS SEMICONDUCTORS AB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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