Correlation Between KB Home and INVEX Controladora

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

By analyzing existing cross correlation between KB Home and INVEX Controladora SAB, you can compare the effects of market volatilities on KB Home and INVEX Controladora 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 INVEX Controladora. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Home and INVEX Controladora.

Diversification Opportunities for KB Home and INVEX Controladora

0.4

Correlation Coefficient

KB Home  INVEX Controladora

Very weak diversification

The 3 months correlation between KBH and INVEX is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding KB Home and INVEX Controladora SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVEX Controladora SAB 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 INVEX Controladora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVEX Controladora SAB has no effect on the direction of KB Home i.e., KB Home and INVEX Controladora go up and down completely randomly.

Pair Corralation between KB Home and INVEX Controladora

Assuming the 90 days trading horizon KB Home is expected to generate 16.98 times less return on investment than INVEX Controladora. But when comparing it to its historical volatility, KB Home is 7.09 times less risky than INVEX Controladora. It trades about 0.13 of its potential returns per unit of risk. INVEX Controladora SAB is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  8,444  in INVEX Controladora SAB on April 20, 2025 and sell it today you would earn a total of  556.00  from holding INVEX Controladora SAB or generate 6.58% return on investment over 90 days.

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

KB Home  vs.  INVEX Controladora SAB

KB Home

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KB Home are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, KB Home is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

INVEX Controladora SAB

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in INVEX Controladora SAB are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, INVEX Controladora may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with KB Home and INVEX Controladora

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

The idea behind KB Home and INVEX Controladora SAB 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.