Correlation Between KB HOME and HubSpot

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

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

Diversification Opportunities for KB HOME and HubSpot

0.37

Correlation Coefficient

KB HOME  HubSpot

Weak diversification

The 3 months correlation between KBH and HubSpot is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding KB HOME and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot 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 HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of KB HOME i.e., KB HOME and HubSpot go up and down completely randomly.

Pair Corralation between KB HOME and HubSpot

Assuming the 90 days trading horizon KB HOME is expected to generate 0.98 times more return on investment than HubSpot. However, KB HOME is 1.02 times less risky than HubSpot. It trades about 0.01 of its potential returns per unit of risk. HubSpot is currently generating about -0.07 per unit of risk. If you would invest  4,837  in KB HOME on May 2, 2025 and sell it today you would lose (17.00) from holding KB HOME or give up 0.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

KB HOME  vs.  HubSpot

KB HOME

Risk-Adjusted Performance

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 comparatively stable basic indicators, KB HOME is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

HubSpot

Risk-Adjusted Performance

Very Weak

Over the last 90 days HubSpot has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with KB HOME and HubSpot

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

The idea behind KB HOME and HubSpot 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.