Correlation Between Beazer Homes and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and Cellnex Telecom 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 Cellnex Telecom 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 Cellnex Telecom SA, you can compare the effects of market volatilities on Beazer Homes and Cellnex Telecom 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 Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and Cellnex Telecom.
Diversification Opportunities for Beazer Homes and Cellnex Telecom
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beazer and Cellnex is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and Cellnex Telecom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellnex Telecom SA 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 Cellnex Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellnex Telecom SA has no effect on the direction of Beazer Homes i.e., Beazer Homes and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Beazer Homes and Cellnex Telecom
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 2.47 times more return on investment than Cellnex Telecom. However, Beazer Homes is 2.47 times more volatile than Cellnex Telecom SA. It trades about 0.09 of its potential returns per unit of risk. Cellnex Telecom SA is currently generating about 0.02 per unit of risk. If you would invest 1,311 in Beazer Homes USA on September 14, 2024 and sell it today you would earn a total of 1,855 from holding Beazer Homes USA or generate 141.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.43% |
| Values | Daily Returns |
Beazer Homes USA vs. Cellnex Telecom SA
Performance |
| Timeline |
| Beazer Homes USA |
| Cellnex Telecom SA |
Beazer Homes and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and Cellnex Telecom
The main advantage of trading using opposite Beazer Homes and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, Cellnex Telecom 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 Cellnex Telecom will offset losses from the drop in Cellnex Telecom's long position.| Beazer Homes vs. Samsung Electronics Co | Beazer Homes vs. Samsung Electronics Co | Beazer Homes vs. Hyundai Motor | Beazer Homes vs. Reliance Industries Ltd |
| Cellnex Telecom vs. PureTech Health plc | Cellnex Telecom vs. Beazer Homes USA | Cellnex Telecom vs. Tatton Asset Management | Cellnex Telecom vs. Ecofin Global Utilities |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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