Correlation Between KB HOME and PPHE HOTEL
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
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KBH and PPHE is -0.61. 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 1.01 times more volatile than PPHE HOTEL GROUP. It trades about -0.21 of its total potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.08 per unit of volatility. If you would invest 1,460 in PPHE HOTEL GROUP on December 5, 2024 and sell it today you would earn a total of 120.00 from holding PPHE HOTEL GROUP or generate 8.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KB HOME vs. PPHE HOTEL GROUP
Performance |
Timeline |
KB HOME |
PPHE HOTEL GROUP |
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.KB HOME vs. Cars Inc | KB HOME vs. CARSALESCOM | KB HOME vs. OAKTRSPECLENDNEW | KB HOME vs. Commonwealth Bank of |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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