Correlation Between Beazer Homes and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Beazer Homes and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and International Consolidated.
Diversification Opportunities for Beazer Homes and International Consolidated
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beazer and International is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Beazer Homes i.e., Beazer Homes and International Consolidated go up and down completely randomly.
Pair Corralation between Beazer Homes and International Consolidated
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 2.21 times more return on investment than International Consolidated. However, Beazer Homes is 2.21 times more volatile than International Consolidated Airlines. It trades about 0.06 of its potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.08 per unit of risk. If you would invest 1,517 in Beazer Homes USA on October 12, 2024 and sell it today you would earn a total of 1,073 from holding Beazer Homes USA or generate 70.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 58.8% |
| Values | Daily Returns |
Beazer Homes USA vs. International Consolidated Air
Performance |
| Timeline |
| Beazer Homes USA |
| International Consolidated |
Beazer Homes and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and International Consolidated
The main advantage of trading using opposite Beazer Homes and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Beazer Homes vs. Walmart | Beazer Homes vs. BYD Co | Beazer Homes vs. Volkswagen AG | Beazer Homes vs. Volkswagen AG Non Vtg |
| International Consolidated vs. MediaZest plc | International Consolidated vs. Everyman Media Group | International Consolidated vs. JD Sports Fashion | International Consolidated vs. Beazer Homes USA |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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