Correlation Between FUYO GENERAL and KB HOME
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and KB HOME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and KB HOME, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and KB HOME.
Diversification Opportunities for FUYO GENERAL and KB HOME
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between FUYO and KBH is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME and FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and KB HOME go up and down completely randomly.
Pair Corralation between FUYO GENERAL and KB HOME
Assuming the 90 days horizon FUYO GENERAL LEASE is expected to generate 0.65 times more return on investment than KB HOME. However, FUYO GENERAL LEASE is 1.55 times less risky than KB HOME. It trades about 0.02 of its potential returns per unit of risk. KB HOME is currently generating about 0.0 per unit of risk. If you would invest 6,900 in FUYO GENERAL LEASE on September 21, 2024 and sell it today you would earn a total of 100.00 from holding FUYO GENERAL LEASE or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. KB HOME
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| KB HOME |
FUYO GENERAL and KB HOME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and KB HOME
The main advantage of trading using opposite FUYO GENERAL and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. Air Transport Services | FUYO GENERAL vs. EVS Broadcast Equipment | FUYO GENERAL vs. GFL ENVIRONM | FUYO GENERAL vs. Broadcom |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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