Correlation Between Beazer Homes and SCANSOURCE
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and SCANSOURCE 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 SCANSOURCE 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 SCANSOURCE, you can compare the effects of market volatilities on Beazer Homes and SCANSOURCE 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 SCANSOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and SCANSOURCE.
Diversification Opportunities for Beazer Homes and SCANSOURCE
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beazer and SCANSOURCE is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE 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 SCANSOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE has no effect on the direction of Beazer Homes i.e., Beazer Homes and SCANSOURCE go up and down completely randomly.
Pair Corralation between Beazer Homes and SCANSOURCE
Assuming the 90 days trading horizon Beazer Homes USA is expected to under-perform the SCANSOURCE. In addition to that, Beazer Homes is 1.16 times more volatile than SCANSOURCE. It trades about -0.29 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.02 per unit of volatility. If you would invest 4,740 in SCANSOURCE on October 30, 2024 and sell it today you would earn a total of 40.00 from holding SCANSOURCE or generate 0.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beazer Homes USA vs. SCANSOURCE
Performance |
| Timeline |
| Beazer Homes USA |
| SCANSOURCE |
Beazer Homes and SCANSOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and SCANSOURCE
The main advantage of trading using opposite Beazer Homes and SCANSOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, SCANSOURCE 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 SCANSOURCE will offset losses from the drop in SCANSOURCE's long position.| Beazer Homes vs. ALBIS LEASING AG | Beazer Homes vs. Canadian Utilities Limited | Beazer Homes vs. Yuexiu Transport Infrastructure | Beazer Homes vs. Air Transport 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |