Correlation Between KB HOME and PPHE HOTEL

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both KB HOME and PPHE HOTEL 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 KB HOME and PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB HOME and PPHE HOTEL GROUP, you can compare the effects of market volatilities on KB HOME and PPHE HOTEL 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 KB HOME with a short position of PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB HOME and PPHE HOTEL.

Diversification Opportunities for KB HOME and PPHE HOTEL

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between KBH and PPHE is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding KB HOME and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP and KB HOME 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 KB HOME are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of KB HOME i.e., KB HOME and PPHE HOTEL go up and down completely randomly.

Pair Corralation between KB HOME and PPHE HOTEL

Assuming the 90 days trading horizon KB HOME is expected to under-perform the PPHE HOTEL. In addition to that, KB HOME is 1.15 times more volatile than PPHE HOTEL GROUP. It trades about -0.13 of its total potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about -0.1 per unit of volatility. If you would invest  1,620  in PPHE HOTEL GROUP on December 27, 2024 and sell it today you would lose (180.00) from holding PPHE HOTEL GROUP or give up 11.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

KB HOME  vs.  PPHE HOTEL GROUP

 Performance 
       Timeline  
KB HOME 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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.
PPHE HOTEL GROUP 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PPHE HOTEL GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

KB HOME and PPHE HOTEL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KB HOME and PPHE HOTEL

The main advantage of trading using opposite KB HOME and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB HOME position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.
The idea behind KB HOME and PPHE HOTEL GROUP 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

Other Complementary Tools

Investing Opportunities
Build portfolios using our predefined set of ideas and optimize them against your investing preferences
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Global Correlations
Find global opportunities by holding instruments from different markets
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance