Correlation Between KB HOME and 24SEVENOFFICE GROUP
Can any of the company-specific risk be diversified away by investing in both KB HOME and 24SEVENOFFICE GROUP 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 HOME and 24SEVENOFFICE GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB HOME and 24SEVENOFFICE GROUP AB, you can compare the effects of market volatilities on KB HOME and 24SEVENOFFICE GROUP 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 HOME with a short position of 24SEVENOFFICE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB HOME and 24SEVENOFFICE GROUP.
Diversification Opportunities for KB HOME and 24SEVENOFFICE GROUP
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KBH and 24SEVENOFFICE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding KB HOME and 24SEVENOFFICE GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 24SEVENOFFICE GROUP and KB HOME 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 HOME are associated (or correlated) with 24SEVENOFFICE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 24SEVENOFFICE GROUP has no effect on the direction of KB HOME i.e., KB HOME and 24SEVENOFFICE GROUP go up and down completely randomly.
Pair Corralation between KB HOME and 24SEVENOFFICE GROUP
Assuming the 90 days trading horizon KB HOME is expected to generate 2.02 times more return on investment than 24SEVENOFFICE GROUP. However, KB HOME is 2.02 times more volatile than 24SEVENOFFICE GROUP AB. It trades about 0.18 of its potential returns per unit of risk. 24SEVENOFFICE GROUP AB is currently generating about -0.14 per unit of risk. 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 |
KB HOME vs. 24SEVENOFFICE GROUP AB
Performance |
| Timeline |
| KB HOME |
| 24SEVENOFFICE GROUP |
KB HOME and 24SEVENOFFICE GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB HOME and 24SEVENOFFICE GROUP
The main advantage of trading using opposite KB HOME and 24SEVENOFFICE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB HOME position performs unexpectedly, 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP will offset losses from the drop in 24SEVENOFFICE GROUP's long position.| KB HOME vs. Apple Inc | KB HOME vs. Apple Inc | KB HOME vs. Superior Plus Corp | KB HOME vs. SIVERS SEMICONDUCTORS AB |
| 24SEVENOFFICE GROUP vs. Salesforce | 24SEVENOFFICE GROUP vs. SAP SE | 24SEVENOFFICE GROUP vs. Workiva | 24SEVENOFFICE GROUP vs. Fastly Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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