Correlation Between Hansa Investment and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both Hansa Investment 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 Hansa Investment and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hansa Investment and Beazer Homes USA, you can compare the effects of market volatilities on Hansa Investment 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 Hansa Investment with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hansa Investment and Beazer Homes.
Diversification Opportunities for Hansa Investment and Beazer Homes
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hansa and Beazer is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hansa Investment 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 Hansa Investment 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 Hansa Investment 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 Hansa Investment i.e., Hansa Investment and Beazer Homes go up and down completely randomly.
Pair Corralation between Hansa Investment and Beazer Homes
Assuming the 90 days trading horizon Hansa Investment is expected to generate 6.86 times less return on investment than Beazer Homes. But when comparing it to its historical volatility, Hansa Investment is 2.66 times less risky than Beazer Homes. It trades about 0.04 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,364 in Beazer Homes USA on September 3, 2024 and sell it today you would earn a total of 2,141 from holding Beazer Homes USA or generate 156.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 57.43% |
| Values | Daily Returns |
Hansa Investment vs. Beazer Homes USA
Performance |
| Timeline |
| Hansa Investment |
| Beazer Homes USA |
Hansa Investment and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hansa Investment and Beazer Homes
The main advantage of trading using opposite Hansa Investment and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hansa Investment 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.| Hansa Investment vs. Hansa Biopharma AB | Hansa Investment vs. Hansa Trust | Hansa Investment vs. Eastman Chemical Co | Hansa Investment vs. American Tower REIT |
| Beazer Homes vs. Herald Investment Trust | Beazer Homes vs. New Residential Investment | Beazer Homes vs. Hansa Investment | Beazer Homes vs. Veolia Environnement VE |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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