Correlation Between KB Home and Summit Bank

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

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

Diversification Opportunities for KB Home and Summit Bank

-0.41

Correlation Coefficient

KB Home  Summit Bank

Very good diversification

The 3 months correlation between KBH and Summit is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding KB Home and Summit Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Bank 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 Summit Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Bank Group has no effect on the direction of KB Home i.e., KB Home and Summit Bank go up and down completely randomly.

Pair Corralation between KB Home and Summit Bank

Considering the 90-day investment horizon KB Home is expected to under-perform the Summit Bank. In addition to that, KB Home is 3.77 times more volatile than Summit Bank Group. It trades about -0.04 of its total potential returns per unit of risk. Summit Bank Group is currently generating about 0.27 per unit of volatility. If you would invest  1,575  in Summit Bank Group on September 7, 2025 and sell it today you would earn a total of  145.00  from holding Summit Bank Group or generate 9.21% return on investment over 90 days.

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

KB Home  vs.  Summit Bank Group

KB Home

Risk-Adjusted Performance

Weakest

Over the last 90 days KB Home has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, KB Home is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Summit Bank Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Summit Bank Group are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward-looking signals, Summit Bank may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with KB Home and Summit Bank

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

The idea behind KB Home and Summit Bank 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.

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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.