Correlation Between Beazer Homes and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and Intermediate Capital 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 Intermediate Capital 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 Intermediate Capital Group, you can compare the effects of market volatilities on Beazer Homes and Intermediate Capital 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 Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and Intermediate Capital.
Diversification Opportunities for Beazer Homes and Intermediate Capital
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beazer and Intermediate is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Beazer Homes i.e., Beazer Homes and Intermediate Capital go up and down completely randomly.
Pair Corralation between Beazer Homes and Intermediate Capital
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 1.63 times more return on investment than Intermediate Capital. However, Beazer Homes is 1.63 times more volatile than Intermediate Capital Group. It trades about 0.26 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.0 per unit of risk. If you would invest 3,034 in Beazer Homes USA on August 30, 2024 and sell it today you would earn a total of 482.00 from holding Beazer Homes USA or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 69.57% |
| Values | Daily Returns |
Beazer Homes USA vs. Intermediate Capital Group
Performance |
| Timeline |
| Beazer Homes USA |
| Intermediate Capital |
Beazer Homes and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and Intermediate Capital
The main advantage of trading using opposite Beazer Homes and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's long position.| Beazer Homes vs. GreenX Metals | Beazer Homes vs. Jacquet Metal Service | Beazer Homes vs. Futura Medical | Beazer Homes vs. Kaufman Et Broad |
| Intermediate Capital vs. Sabre Insurance Group | Intermediate Capital vs. Tatton Asset Management | Intermediate Capital vs. Zurich Insurance Group | Intermediate Capital vs. Associated British Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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