Correlation Between Eastinco Mining and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining 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 Eastinco Mining and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastinco Mining Exploration and Beazer Homes USA, you can compare the effects of market volatilities on Eastinco Mining 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 Eastinco Mining with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Beazer Homes.
Diversification Opportunities for Eastinco Mining and Beazer Homes
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastinco and Beazer is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration 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 Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and Beazer Homes go up and down completely randomly.
Pair Corralation between Eastinco Mining and Beazer Homes
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 1.41 times more return on investment than Beazer Homes. However, Eastinco Mining is 1.41 times more volatile than Beazer Homes USA. It trades about 0.34 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.0 per unit of risk. If you would invest 4,550 in Eastinco Mining Exploration on October 21, 2024 and sell it today you would earn a total of 850.00 from holding Eastinco Mining Exploration or generate 18.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Beazer Homes USA
Performance |
| Timeline |
| Eastinco Mining Expl |
| Beazer Homes USA |
Eastinco Mining and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Beazer Homes
The main advantage of trading using opposite Eastinco Mining and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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.| Eastinco Mining vs. Thor Mining PLC | Eastinco Mining vs. Lundin Mining Corp | Eastinco Mining vs. McEwen Mining | Eastinco Mining vs. Invesco Physical Silver |
| Beazer Homes vs. Smithson Investment Trust | Beazer Homes vs. PPHE Hotel Group | Beazer Homes vs. Melia Hotels | Beazer Homes vs. EJF Investments |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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