Correlation Between TOTAL GABON and KB HOME
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON 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 TOTAL GABON and KB HOME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and KB HOME, you can compare the effects of market volatilities on TOTAL GABON 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 TOTAL GABON with a short position of KB HOME. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and KB HOME.
Diversification Opportunities for TOTAL GABON and KB HOME
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TOTAL and KBH is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and KB HOME in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB HOME and TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON i.e., TOTAL GABON and KB HOME go up and down completely randomly.
Pair Corralation between TOTAL GABON and KB HOME
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 0.65 times more return on investment than KB HOME. However, TOTAL GABON is 1.55 times less risky than KB HOME. It trades about 0.08 of its potential returns per unit of risk. KB HOME is currently generating about -0.08 per unit of risk. If you would invest 16,700 in TOTAL GABON on December 2, 2024 and sell it today you would earn a total of 650.00 from holding TOTAL GABON or generate 3.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TOTAL GABON vs. KB HOME
Performance |
Timeline |
TOTAL GABON |
KB HOME |
TOTAL GABON and KB HOME Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TOTAL GABON and KB HOME
The main advantage of trading using opposite TOTAL GABON and KB HOME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON 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.TOTAL GABON vs. Check Point Software | TOTAL GABON vs. PLAYMATES TOYS | TOTAL GABON vs. GAMES BOX SA | TOTAL GABON vs. X FAB Silicon Foundries |
KB HOME vs. INTER CARS SA | KB HOME vs. FONIX MOBILE PLC | KB HOME vs. GEELY AUTOMOBILE | KB HOME vs. T Mobile |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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