Correlation Between Beazer Homes and Astellas Pharma
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and Astellas Pharma 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 Astellas Pharma 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 Astellas Pharma, you can compare the effects of market volatilities on Beazer Homes and Astellas Pharma 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 Astellas Pharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and Astellas Pharma.
Diversification Opportunities for Beazer Homes and Astellas Pharma
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beazer and Astellas is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and Astellas Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astellas Pharma 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 Astellas Pharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astellas Pharma has no effect on the direction of Beazer Homes i.e., Beazer Homes and Astellas Pharma go up and down completely randomly.
Pair Corralation between Beazer Homes and Astellas Pharma
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 1.68 times more return on investment than Astellas Pharma. However, Beazer Homes is 1.68 times more volatile than Astellas Pharma. It trades about 0.02 of its potential returns per unit of risk. Astellas Pharma is currently generating about -0.04 per unit of risk. If you would invest 2,540 in Beazer Homes USA on November 3, 2024 and sell it today you would earn a total of 60.00 from holding Beazer Homes USA or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Beazer Homes USA vs. Astellas Pharma
Performance |
| Timeline |
| Beazer Homes USA |
| Astellas Pharma |
Beazer Homes and Astellas Pharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beazer Homes and Astellas Pharma
The main advantage of trading using opposite Beazer Homes and Astellas Pharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, Astellas Pharma 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 Astellas Pharma will offset losses from the drop in Astellas Pharma's long position.| Beazer Homes vs. Warner Music Group | Beazer Homes vs. GRIFFIN MINING LTD | Beazer Homes vs. Perseus Mining Limited | Beazer Homes vs. GEAR4MUSIC LS 10 |
| Astellas Pharma vs. Zoom Video Communications | Astellas Pharma vs. TreeHouse Foods | Astellas Pharma vs. GWILLI FOOD | Astellas Pharma vs. COMBA TELECOM SYST |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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