Correlation Between KB HOME and Rite Aid
Can any of the company-specific risk be diversified away by investing in both KB HOME and Rite Aid 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 Rite Aid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB HOME and Rite Aid, you can compare the effects of market volatilities on KB HOME and Rite Aid 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 Rite Aid. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB HOME and Rite Aid.
Diversification Opportunities for KB HOME and Rite Aid
Pay attention - limited upside
The 3 months correlation between KBH and Rite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KB HOME and Rite Aid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rite Aid 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 Rite Aid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rite Aid has no effect on the direction of KB HOME i.e., KB HOME and Rite Aid go up and down completely randomly.
Pair Corralation between KB HOME and Rite Aid
If you would invest 7,425 in KB HOME on September 6, 2024 and sell it today you would earn a total of 75.00 from holding KB HOME or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
KB HOME vs. Rite Aid
Performance |
| Timeline |
| KB HOME |
| Rite Aid |
KB HOME and Rite Aid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB HOME and Rite Aid
The main advantage of trading using opposite KB HOME and Rite Aid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB HOME position performs unexpectedly, Rite Aid 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 Rite Aid will offset losses from the drop in Rite Aid's long position.| KB HOME vs. AEGEAN AIRLINES | KB HOME vs. Warner Music Group | KB HOME vs. Singapore Airlines Limited | KB HOME vs. BROADSTNET LEADL 00025 |
| Rite Aid vs. LION ONE METALS | Rite Aid vs. GameStop Corp | Rite Aid vs. GREENX METALS LTD | Rite Aid vs. HOCHSCHILD MINING |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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