Correlation Between Beazer Homes and Team Internet
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and Team Internet 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 Team Internet 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 Team Internet Group, you can compare the effects of market volatilities on Beazer Homes and Team Internet 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 Team Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and Team Internet.
Diversification Opportunities for Beazer Homes and Team Internet
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beazer and Team is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and Team Internet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Internet Group 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 Team Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Internet Group has no effect on the direction of Beazer Homes i.e., Beazer Homes and Team Internet go up and down completely randomly.
Pair Corralation between Beazer Homes and Team Internet
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 0.77 times more return on investment than Team Internet. However, Beazer Homes USA is 1.3 times less risky than Team Internet. It trades about 0.12 of its potential returns per unit of risk. Team Internet Group is currently generating about -0.16 per unit of risk. If you would invest 3,068 in Beazer Homes USA on September 2, 2024 and sell it today you would earn a total of 437.00 from holding Beazer Homes USA or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 62.12% |
| Values | Daily Returns |
Beazer Homes USA vs. Team Internet Group
Performance |
| Timeline |
| Beazer Homes USA |
| Team Internet Group |
Beazer Homes and Team Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and Team Internet
The main advantage of trading using opposite Beazer Homes and Team Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, Team Internet 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 Team Internet will offset losses from the drop in Team Internet's long position.| Beazer Homes vs. Medical Properties Trust | Beazer Homes vs. Lindsell Train Investment | Beazer Homes vs. HCA Healthcare | Beazer Homes vs. MyHealthChecked Plc |
| Team Internet vs. Oakley Capital Investments | Team Internet vs. Smithson Investment Trust | Team Internet vs. Compal Electronics GDR | Team Internet vs. Diversified Energy |
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.
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