Correlation Between Beazer Homes and Compagnie Plastic
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and Compagnie Plastic 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 Beazer Homes and Compagnie Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beazer Homes USA and Compagnie Plastic Omnium, you can compare the effects of market volatilities on Beazer Homes and Compagnie Plastic 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 Beazer Homes with a short position of Compagnie Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and Compagnie Plastic.
Diversification Opportunities for Beazer Homes and Compagnie Plastic
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beazer and Compagnie is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and Compagnie Plastic Omnium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compagnie Plastic Omnium and Beazer Homes 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 Beazer Homes USA are associated (or correlated) with Compagnie Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compagnie Plastic Omnium has no effect on the direction of Beazer Homes i.e., Beazer Homes and Compagnie Plastic go up and down completely randomly.
Pair Corralation between Beazer Homes and Compagnie Plastic
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 1.65 times more return on investment than Compagnie Plastic. However, Beazer Homes is 1.65 times more volatile than Compagnie Plastic Omnium. It trades about 0.07 of its potential returns per unit of risk. Compagnie Plastic Omnium is currently generating about -0.02 per unit of risk. If you would invest 1,503 in Beazer Homes USA on October 30, 2024 and sell it today you would earn a total of 1,271 from holding Beazer Homes USA or generate 84.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.15% |
| Values | Daily Returns |
Beazer Homes USA vs. Compagnie Plastic Omnium
Performance |
| Timeline |
| Beazer Homes USA |
| Compagnie Plastic Omnium |
Beazer Homes and Compagnie Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and Compagnie Plastic
The main advantage of trading using opposite Beazer Homes and Compagnie Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, Compagnie Plastic 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 Compagnie Plastic will offset losses from the drop in Compagnie Plastic's long position.| Beazer Homes vs. Vitec Software Group | Beazer Homes vs. JD Sports Fashion | Beazer Homes vs. Software Circle plc | Beazer Homes vs. Kaufman Et Broad |
| Compagnie Plastic vs. Canadian General Investments | Compagnie Plastic vs. Home Depot | Compagnie Plastic vs. Global Net Lease | Compagnie Plastic vs. FC Investment Trust |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |