Correlation Between XLMedia PLC and Beazer Homes
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC 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 XLMedia PLC and Beazer Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Beazer Homes USA, you can compare the effects of market volatilities on XLMedia PLC 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 XLMedia PLC with a short position of Beazer Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Beazer Homes.
Diversification Opportunities for XLMedia PLC and Beazer Homes
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between XLMedia and Beazer is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia 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 XLMedia PLC 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 XLMedia 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 XLMedia PLC i.e., XLMedia PLC and Beazer Homes go up and down completely randomly.
Pair Corralation between XLMedia PLC and Beazer Homes
Assuming the 90 days trading horizon XLMedia PLC is expected to generate 1.2 times less return on investment than Beazer Homes. In addition to that, XLMedia PLC is 1.18 times more volatile than Beazer Homes USA. It trades about 0.09 of its total potential returns per unit of risk. Beazer Homes USA is currently generating about 0.12 per unit of volatility. If you would invest 3,068 in Beazer Homes USA on August 31, 2024 and sell it today you would earn a total of 448.00 from holding Beazer Homes USA or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 62.5% |
| Values | Daily Returns |
XLMedia PLC vs. Beazer Homes USA
Performance |
| Timeline |
| XLMedia PLC |
| Beazer Homes USA |
XLMedia PLC and Beazer Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Beazer Homes
The main advantage of trading using opposite XLMedia PLC and Beazer Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC 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.| XLMedia PLC vs. Hilton Food Group | XLMedia PLC vs. Liontrust Asset Management | XLMedia PLC vs. Ebro Foods | XLMedia PLC vs. Litigation Capital Management |
| Beazer Homes vs. Cognizant Technology Solutions | Beazer Homes vs. Spotify Technology SA | Beazer Homes vs. Sunny Optical Technology | Beazer Homes vs. Ashtead Technology Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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