Correlation Between Vista Oil and KB Home
Can any of the company-specific risk be diversified away by investing in both Vista Oil 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 Vista Oil and KB Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Oil Gas and KB Home, you can compare the effects of market volatilities on Vista Oil 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 Vista Oil with a short position of KB Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and KB Home.
Diversification Opportunities for Vista Oil and KB Home
Good diversification
The 3 months correlation between Vista and KBH is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas and KB Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Home and Vista Oil 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 Vista Oil Gas 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 Vista Oil i.e., Vista Oil and KB Home go up and down completely randomly.
Pair Corralation between Vista Oil and KB Home
If you would invest 100,000 in Vista Oil Gas on September 20, 2024 and sell it today you would earn a total of 12,183 from holding Vista Oil Gas or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vista Oil Gas vs. KB Home
Performance |
| Timeline |
| Vista Oil Gas |
| KB Home |
Vista Oil and KB Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Oil and KB Home
The main advantage of trading using opposite Vista Oil and KB Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil 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.| Vista Oil vs. Applied Materials | Vista Oil vs. Genworth Financial | Vista Oil vs. First Republic Bank | Vista Oil vs. Hoteles City Express |
| KB Home vs. Lennar | KB Home vs. Servicios Corporativos Javer | KB Home vs. Desarrolladora Homex SAB | KB Home vs. Sare Holding SAB |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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