Correlation Between Eneraqua Technologies and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Eneraqua Technologies 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 Eneraqua Technologies and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eneraqua Technologies PLC and Beazer Homes USA, you can compare the effects of market volatilities on Eneraqua Technologies 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 Eneraqua Technologies with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eneraqua Technologies and Beazer Homes.
Diversification Opportunities for Eneraqua Technologies and Beazer Homes
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eneraqua and Beazer is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Eneraqua Technologies PLC 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 Eneraqua Technologies 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 Eneraqua Technologies PLC 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 Eneraqua Technologies i.e., Eneraqua Technologies and Beazer Homes go up and down completely randomly.
Pair Corralation between Eneraqua Technologies and Beazer Homes
Assuming the 90 days trading horizon Eneraqua Technologies PLC is expected to generate 0.42 times more return on investment than Beazer Homes. However, Eneraqua Technologies PLC is 2.38 times less risky than Beazer Homes. It trades about -0.14 of its potential returns per unit of risk. Beazer Homes USA is currently generating about -0.15 per unit of risk. If you would invest 4,200 in Eneraqua Technologies PLC on November 5, 2024 and sell it today you would lose (300.00) from holding Eneraqua Technologies PLC or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Eneraqua Technologies PLC vs. Beazer Homes USA
Performance |
| Timeline |
| Eneraqua Technologies PLC |
| Beazer Homes USA |
Eneraqua Technologies and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eneraqua Technologies and Beazer Homes
The main advantage of trading using opposite Eneraqua Technologies and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eneraqua Technologies 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.| Eneraqua Technologies vs. Gaztransport et Technigaz | Eneraqua Technologies vs. Micron Technology | Eneraqua Technologies vs. Ashtead Technology Holdings | Eneraqua Technologies vs. Sabien Technology Group |
| Beazer Homes vs. GoldMining | Beazer Homes vs. Alfa Financial Software | Beazer Homes vs. Bloomsbury Publishing Plc | Beazer Homes vs. Lundin Mining Corp |
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 Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |