Correlation Between Lion One and KB HOME
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and KB HOME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and KB HOME, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and KB HOME.
Diversification Opportunities for Lion One and KB HOME
Significant diversification
The 3 months correlation between Lion and KBH is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and KB HOME go up and down completely randomly.
Pair Corralation between Lion One and KB HOME
Assuming the 90 days horizon Lion One Metals is expected to under-perform the KB HOME. In addition to that, Lion One is 1.86 times more volatile than KB HOME. It trades about -0.06 of its total potential returns per unit of risk. KB HOME is currently generating about 0.07 per unit of volatility. If you would invest 6,455 in KB HOME on September 1, 2024 and sell it today you would earn a total of 1,345 from holding KB HOME or generate 20.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
Lion One Metals vs. KB HOME
Performance |
| Timeline |
| Lion One Metals |
| KB HOME |
Lion One and KB HOME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and KB HOME
The main advantage of trading using opposite Lion One and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. NIPPON STEEL SPADR | Lion One vs. United States Steel | Lion One vs. Nippon Steel | Lion One vs. Singapore Telecommunications Limited |
| KB HOME vs. ARISTOCRAT LEISURE | KB HOME vs. Khiron Life Sciences | KB HOME vs. BlueScope Steel Limited | KB HOME vs. KOOL2PLAY SA ZY |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |