Correlation Between Jacquet Metal and KB HOME

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

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

Diversification Opportunities for Jacquet Metal and KB HOME

-0.71

Correlation Coefficient

Jacquet Metal  KB HOME

Pay attention - limited upside

The 3 months correlation between Jacquet and KBH is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jacquet Metal Service and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME and Jacquet Metal 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 Jacquet Metal Service 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 Jacquet Metal i.e., Jacquet Metal and KB HOME go up and down completely randomly.

Pair Corralation between Jacquet Metal and KB HOME

Assuming the 90 days horizon Jacquet Metal is expected to generate 12.25 times less return on investment than KB HOME. But when comparing it to its historical volatility, Jacquet Metal Service is 1.29 times less risky than KB HOME. It trades about 0.01 of its potential returns per unit of risk. KB HOME is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,241  in KB HOME on October 5, 2024 and sell it today you would earn a total of  3,059  from holding KB HOME or generate 94.38% return on investment over 90 days.

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

Jacquet Metal Service  vs.  KB HOME

Jacquet Metal Service

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Jacquet Metal Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Jacquet Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Jacquet Metal and KB HOME

The main advantage of trading using opposite Jacquet Metal and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jacquet Metal 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 Jacquet Metal Service 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.