Correlation Between Beazer Homes and AEON STORES
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and AEON STORES 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 AEON STORES 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 AEON STORES, you can compare the effects of market volatilities on Beazer Homes and AEON STORES 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 AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and AEON STORES.
Diversification Opportunities for Beazer Homes and AEON STORES
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Beazer and AEON is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Beazer Homes i.e., Beazer Homes and AEON STORES go up and down completely randomly.
Pair Corralation between Beazer Homes and AEON STORES
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 0.99 times more return on investment than AEON STORES. However, Beazer Homes USA is 1.01 times less risky than AEON STORES. It trades about 0.05 of its potential returns per unit of risk. AEON STORES is currently generating about -0.01 per unit of risk. If you would invest 2,080 in Beazer Homes USA on September 1, 2024 and sell it today you would earn a total of 1,180 from holding Beazer Homes USA or generate 56.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Beazer Homes USA vs. AEON STORES
Performance |
| Timeline |
| Beazer Homes USA |
| AEON STORES |
Beazer Homes and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and AEON STORES
The main advantage of trading using opposite Beazer Homes and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES's long position.| Beazer Homes vs. Transport International Holdings | Beazer Homes vs. SPORTING | Beazer Homes vs. SCIENCE IN SPORT | Beazer Homes vs. Salesforce |
| AEON STORES vs. SIVERS SEMICONDUCTORS AB | AEON STORES vs. Darden Restaurants | AEON STORES vs. Reliance Steel Aluminum | AEON STORES vs. Q2M Managementberatung 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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