Correlation Between EAT WELL and KB HOME

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

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

Diversification Opportunities for EAT WELL and KB HOME

0.0

Correlation Coefficient

EAT WELL  KB HOME

Pay attention - limited upside

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

Pair Corralation between EAT WELL and KB HOME

If you would invest  11.00  in EAT WELL INVESTMENT on September 22, 2024 and sell it today you would earn a total of  0.00  from holding EAT WELL INVESTMENT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

EAT WELL INVESTMENT  vs.  KB HOME

EAT WELL INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EAT WELL INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, EAT WELL is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

KB HOME

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with EAT WELL and KB HOME

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

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..