Correlation Between PPHE Hotel and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both PPHE Hotel 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 PPHE Hotel and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PPHE Hotel Group and Beazer Homes USA, you can compare the effects of market volatilities on PPHE Hotel 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 PPHE Hotel with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPHE Hotel and Beazer Homes.
Diversification Opportunities for PPHE Hotel and Beazer Homes
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PPHE and Beazer is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PPHE Hotel Group 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 PPHE Hotel 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 PPHE Hotel Group 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 PPHE Hotel i.e., PPHE Hotel and Beazer Homes go up and down completely randomly.
Pair Corralation between PPHE Hotel and Beazer Homes
Assuming the 90 days trading horizon PPHE Hotel is expected to generate 7.44 times less return on investment than Beazer Homes. But when comparing it to its historical volatility, PPHE Hotel Group is 2.42 times less risky than Beazer Homes. It trades about 0.02 of its potential returns per unit of risk. Beazer Homes USA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,520 in Beazer Homes USA on November 2, 2024 and sell it today you would earn a total of 1,260 from holding Beazer Homes USA or generate 82.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.64% |
| Values | Daily Returns |
PPHE Hotel Group vs. Beazer Homes USA
Performance |
| Timeline |
| PPHE Hotel Group |
| Beazer Homes USA |
PPHE Hotel and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PPHE Hotel and Beazer Homes
The main advantage of trading using opposite PPHE Hotel and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PPHE Hotel 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.| PPHE Hotel vs. Litigation Capital Management | PPHE Hotel vs. CAP LEASE AVIATION | PPHE Hotel vs. Dairy Farm International | PPHE Hotel vs. SBM Offshore NV |
| Beazer Homes vs. Eco Animal Health | Beazer Homes vs. Cars Inc | Beazer Homes vs. Universal Health Services | Beazer Homes vs. Iron Mountain |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |