Correlation Between PACIFIC ONLINE and KB HOME

Can any of the company-specific risk be diversified away by investing in both PACIFIC ONLINE 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 PACIFIC ONLINE and KB HOME into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PACIFIC ONLINE and KB HOME, you can compare the effects of market volatilities on PACIFIC ONLINE 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 PACIFIC ONLINE with a short position of KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACIFIC ONLINE and KB HOME.

Diversification Opportunities for PACIFIC ONLINE and KB HOME

0.0

Correlation Coefficient

PACIFIC ONLINE  KB HOME

Pay attention - limited upside

The 3 months correlation between PACIFIC and KBH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC ONLINE and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME and PACIFIC ONLINE 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 PACIFIC ONLINE 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 PACIFIC ONLINE i.e., PACIFIC ONLINE and KB HOME go up and down completely randomly.

Pair Corralation between PACIFIC ONLINE and KB HOME

If you would invest  15.00  in PACIFIC ONLINE on December 3, 2024 and sell it today you would earn a total of  0.00  from holding PACIFIC ONLINE or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PACIFIC ONLINE  vs.  KB HOME

PACIFIC ONLINE

Risk-Adjusted Performance

Very Weak

Over the last 90 days PACIFIC ONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PACIFIC ONLINE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

KB HOME

Risk-Adjusted Performance

Very Weak

Over the last 90 days KB HOME has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PACIFIC ONLINE and KB HOME

The main advantage of trading using opposite PACIFIC ONLINE and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACIFIC ONLINE 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.

The idea behind PACIFIC ONLINE and KB HOME pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.