Correlation Between Aedas Homes and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Aedas Homes 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 Aedas Homes and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and Beazer Homes USA, you can compare the effects of market volatilities on Aedas Homes 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 Aedas Homes with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Beazer Homes.
Diversification Opportunities for Aedas Homes and Beazer Homes
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aedas and Beazer is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA 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 Aedas 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 Aedas Homes SA 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 Aedas Homes i.e., Aedas Homes and Beazer Homes go up and down completely randomly.
Pair Corralation between Aedas Homes and Beazer Homes
Assuming the 90 days horizon Aedas Homes SA is expected to under-perform the Beazer Homes. But the stock apears to be less risky and, when comparing its historical volatility, Aedas Homes SA is 2.64 times less risky than Beazer Homes. The stock trades about -0.16 of its potential returns per unit of risk. The Beazer Homes USA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,900 in Beazer Homes USA on August 30, 2024 and sell it today you would earn a total of 380.00 from holding Beazer Homes USA or generate 13.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aedas Homes SA vs. Beazer Homes USA
Performance |
| Timeline |
| Aedas Homes SA |
| Beazer Homes USA |
Aedas Homes and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and Beazer Homes
The main advantage of trading using opposite Aedas Homes and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes 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.| Aedas Homes vs. Titan Machinery | Aedas Homes vs. Federal Agricultural Mortgage | Aedas Homes vs. Chongqing Machinery Electric | Aedas Homes vs. Penta Ocean Construction Co |
| Beazer Homes vs. Superior Plus Corp | Beazer Homes vs. NMI Holdings | Beazer Homes vs. SIVERS SEMICONDUCTORS AB | Beazer Homes vs. Talanx AG |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |