Correlation Between Centaur Media and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Centaur Media 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 Centaur Media and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and Beazer Homes USA, you can compare the effects of market volatilities on Centaur Media 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 Centaur Media with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and Beazer Homes.
Diversification Opportunities for Centaur Media and Beazer Homes
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centaur and Beazer is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media 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 Centaur Media 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 Centaur Media 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 Centaur Media i.e., Centaur Media and Beazer Homes go up and down completely randomly.
Pair Corralation between Centaur Media and Beazer Homes
Assuming the 90 days trading horizon Centaur Media is expected to generate 2.19 times more return on investment than Beazer Homes. However, Centaur Media is 2.19 times more volatile than Beazer Homes USA. It trades about 0.31 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.12 per unit of risk. If you would invest 2,300 in Centaur Media on October 26, 2024 and sell it today you would earn a total of 650.00 from holding Centaur Media or generate 28.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.68% |
| Values | Daily Returns |
Centaur Media vs. Beazer Homes USA
Performance |
| Timeline |
| Centaur Media |
| Beazer Homes USA |
Centaur Media and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and Beazer Homes
The main advantage of trading using opposite Centaur Media and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media 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.| Centaur Media vs. Atresmedia | Centaur Media vs. Impax Asset Management | Centaur Media vs. JD Sports Fashion | Centaur Media vs. Catalyst Media Group |
| Beazer Homes vs. Zegona Communications Plc | Beazer Homes vs. Fonix Mobile plc | Beazer Homes vs. Geely Automobile Holdings | Beazer Homes vs. Evolution Gaming Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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