Correlation Between Dogness International and KB Home

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

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

Diversification Opportunities for Dogness International and KB Home

0.33

Correlation Coefficient

Dogness International  KB Home

Weak diversification

The 3 months correlation between Dogness and KBH is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dogness International Corp and KB Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Home and Dogness International 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 Dogness International Corp 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 Dogness International i.e., Dogness International and KB Home go up and down completely randomly.

Pair Corralation between Dogness International and KB Home

Given the investment horizon of 90 days Dogness International Corp is expected to generate 6.11 times more return on investment than KB Home. However, Dogness International is 6.11 times more volatile than KB Home. It trades about 0.02 of its potential returns per unit of risk. KB Home is currently generating about -0.08 per unit of risk. If you would invest  4,297  in Dogness International Corp on December 27, 2024 and sell it today you would lose (1,540) from holding Dogness International Corp or give up 35.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Dogness International Corp  vs.  KB Home

Dogness International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dogness International Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dogness International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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. Despite latest uncertain performance, the Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Dogness International and KB Home

The main advantage of trading using opposite Dogness International and KB Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dogness International 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 Dogness International Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.