Correlation Between Beacon Roofing and AMERICAN
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By analyzing existing cross correlation between Beacon Roofing Supply and AMERICAN WTR CAP, you can compare the effects of market volatilities on Beacon Roofing and AMERICAN 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 Beacon Roofing with a short position of AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beacon Roofing and AMERICAN.
Diversification Opportunities for Beacon Roofing and AMERICAN
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Beacon and AMERICAN is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Beacon Roofing Supply and AMERICAN WTR CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN WTR CAP and Beacon Roofing 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 Beacon Roofing Supply are associated (or correlated) with AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN WTR CAP has no effect on the direction of Beacon Roofing i.e., Beacon Roofing and AMERICAN go up and down completely randomly.
Pair Corralation between Beacon Roofing and AMERICAN
Given the investment horizon of 90 days Beacon Roofing Supply is expected to generate 3.73 times more return on investment than AMERICAN. However, Beacon Roofing is 3.73 times more volatile than AMERICAN WTR CAP. It trades about 0.33 of its potential returns per unit of risk. AMERICAN WTR CAP is currently generating about -0.18 per unit of risk. If you would invest 10,132 in Beacon Roofing Supply on October 24, 2024 and sell it today you would earn a total of 1,473 from holding Beacon Roofing Supply or generate 14.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Beacon Roofing Supply vs. AMERICAN WTR CAP
Performance |
| Timeline |
| Beacon Roofing Supply |
| AMERICAN WTR CAP |
Beacon Roofing and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beacon Roofing and AMERICAN
The main advantage of trading using opposite Beacon Roofing and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beacon Roofing position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Beacon Roofing vs. Quanex Building Products | Beacon Roofing vs. Gibraltar Industries | Beacon Roofing vs. Armstrong World Industries | Beacon Roofing vs. Janus International Group |
| AMERICAN vs. Cleantech Power Corp | AMERICAN vs. Molson Coors Brewing | AMERICAN vs. Ultra Clean Holdings | AMERICAN vs. American Clean Resources |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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