Correlation Between Beazer Homes and Lowland Investment
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and Lowland Investment 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 Lowland Investment 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 Lowland Investment Co, you can compare the effects of market volatilities on Beazer Homes and Lowland Investment 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 Lowland Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and Lowland Investment.
Diversification Opportunities for Beazer Homes and Lowland Investment
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Beazer and Lowland is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and Lowland Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowland Investment 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 Lowland Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowland Investment has no effect on the direction of Beazer Homes i.e., Beazer Homes and Lowland Investment go up and down completely randomly.
Pair Corralation between Beazer Homes and Lowland Investment
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 3.66 times more return on investment than Lowland Investment. However, Beazer Homes is 3.66 times more volatile than Lowland Investment Co. It trades about 0.06 of its potential returns per unit of risk. Lowland Investment Co is currently generating about 0.01 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 Together |
| Strength | Insignificant |
| Accuracy | 59.04% |
| Values | Daily Returns |
Beazer Homes USA vs. Lowland Investment Co
Performance |
| Timeline |
| Beazer Homes USA |
| Lowland Investment |
Beazer Homes and Lowland Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and Lowland Investment
The main advantage of trading using opposite Beazer Homes and Lowland Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, Lowland Investment 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 Lowland Investment will offset losses from the drop in Lowland Investment's long position.| Beazer Homes vs. Walmart | Beazer Homes vs. BYD Co | Beazer Homes vs. Volkswagen AG | Beazer Homes vs. Volkswagen AG Non Vtg |
| Lowland Investment vs. Zoom Video Communications | Lowland Investment vs. Bankers Investment Trust | Lowland Investment vs. Raymond James Financial | Lowland Investment 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |