Correlation Between KB HOME and Bet-at-home

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

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

Diversification Opportunities for KB HOME and Bet-at-home

0.27

Correlation Coefficient

KB HOME  Bet-at-home

Modest diversification

The 3 months correlation between KBH and Bet-at-home is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding KB HOME and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home 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 Bet-at-home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of KB HOME i.e., KB HOME and Bet-at-home go up and down completely randomly.

Pair Corralation between KB HOME and Bet-at-home

Assuming the 90 days trading horizon KB HOME is expected to under-perform the Bet-at-home. In addition to that, KB HOME is 1.46 times more volatile than bet at home AG. It trades about -0.42 of its total potential returns per unit of risk. bet at home AG is currently generating about -0.09 per unit of volatility. If you would invest  257.00  in bet at home AG on September 23, 2024 and sell it today you would lose (7.00) from holding bet at home AG or give up 2.72% of portfolio value over 90 days.

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

KB HOME  vs.  bet at home AG

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.

bet at home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days bet at home AG 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 rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with KB HOME and Bet-at-home

The main advantage of trading using opposite KB HOME and Bet-at-home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB HOME position performs unexpectedly, Bet-at-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 Bet-at-home will offset losses from the drop in Bet-at-home's long position.

The idea behind KB HOME and bet at home AG 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.