Correlation Between Beazer Homes and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on Beazer Homes and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and DFS Furniture.
Diversification Opportunities for Beazer Homes and DFS Furniture
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Beazer and DFS is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of Beazer Homes i.e., Beazer Homes and DFS Furniture go up and down completely randomly.
Pair Corralation between Beazer Homes and DFS Furniture
Assuming the 90 days trading horizon Beazer Homes is expected to generate 18.52 times less return on investment than DFS Furniture. In addition to that, Beazer Homes is 1.03 times more volatile than DFS Furniture PLC. It trades about 0.0 of its total potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.08 per unit of volatility. If you would invest 14,140 in DFS Furniture PLC on October 21, 2024 and sell it today you would earn a total of 360.00 from holding DFS Furniture PLC or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.68% |
| Values | Daily Returns |
Beazer Homes USA vs. DFS Furniture PLC
Performance |
| Timeline |
| Beazer Homes USA |
| DFS Furniture PLC |
Beazer Homes and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and DFS Furniture
The main advantage of trading using opposite Beazer Homes and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| Beazer Homes vs. Smithson Investment Trust | Beazer Homes vs. PPHE Hotel Group | Beazer Homes vs. Melia Hotels | Beazer Homes vs. EJF Investments |
| DFS Furniture vs. International Biotechnology Trust | DFS Furniture vs. Manulife Financial Corp | DFS Furniture vs. Dairy Farm International | DFS Furniture vs. Sydbank |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |