Correlation Between Geely Automobile and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Geely Automobile and Beazer Homes 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 Geely Automobile and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geely Automobile Holdings and Beazer Homes USA, you can compare the effects of market volatilities on Geely Automobile and Beazer Homes 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 Geely Automobile with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geely Automobile and Beazer Homes.
Diversification Opportunities for Geely Automobile and Beazer Homes
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Geely and Beazer is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Geely Automobile Holdings and Beazer Homes USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beazer Homes USA and Geely Automobile 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 Geely Automobile Holdings are associated (or correlated) with Beazer Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beazer Homes USA has no effect on the direction of Geely Automobile i.e., Geely Automobile and Beazer Homes go up and down completely randomly.
Pair Corralation between Geely Automobile and Beazer Homes
Assuming the 90 days trading horizon Geely Automobile Holdings is expected to generate 5.9 times more return on investment than Beazer Homes. However, Geely Automobile is 5.9 times more volatile than Beazer Homes USA. It trades about 0.11 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.05 per unit of risk. If you would invest 1,500 in Geely Automobile Holdings on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Geely Automobile Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 60.82% |
| Values | Daily Returns |
Geely Automobile Holdings vs. Beazer Homes USA
Performance |
| Timeline |
| Geely Automobile Holdings |
| Beazer Homes USA |
Geely Automobile and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Geely Automobile and Beazer Homes
The main advantage of trading using opposite Geely Automobile and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geely Automobile position performs unexpectedly, Beazer Homes 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 Beazer Homes will offset losses from the drop in Beazer Homes' long position.| Geely Automobile vs. Coeur Mining | Geely Automobile vs. Primary Health Properties | Geely Automobile vs. Spire Healthcare Group | Geely Automobile vs. Inspiration Healthcare Group |
| Beazer Homes vs. Commerzbank AG | Beazer Homes vs. Dairy Farm International | Beazer Homes vs. Raymond James Financial | Beazer Homes vs. Discover Financial Services |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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