Correlation Between Beazer Homes and ACCSYS TECHPLC
Can any of the company-specific risk be diversified away by investing in both Beazer Homes and ACCSYS TECHPLC 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 Beazer Homes and ACCSYS TECHPLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beazer Homes USA and ACCSYS TECHPLC EO, you can compare the effects of market volatilities on Beazer Homes and ACCSYS TECHPLC 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 Beazer Homes with a short position of ACCSYS TECHPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beazer Homes and ACCSYS TECHPLC.
Diversification Opportunities for Beazer Homes and ACCSYS TECHPLC
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Beazer and ACCSYS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Beazer Homes USA and ACCSYS TECHPLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCSYS TECHPLC EO and Beazer Homes 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 Beazer Homes USA are associated (or correlated) with ACCSYS TECHPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCSYS TECHPLC EO has no effect on the direction of Beazer Homes i.e., Beazer Homes and ACCSYS TECHPLC go up and down completely randomly.
Pair Corralation between Beazer Homes and ACCSYS TECHPLC
Assuming the 90 days trading horizon Beazer Homes USA is expected to generate 1.46 times more return on investment than ACCSYS TECHPLC. However, Beazer Homes is 1.46 times more volatile than ACCSYS TECHPLC EO. It trades about -0.01 of its potential returns per unit of risk. ACCSYS TECHPLC EO is currently generating about -0.06 per unit of risk. If you would invest 2,840 in Beazer Homes USA on October 24, 2024 and sell it today you would lose (140.00) from holding Beazer Homes USA or give up 4.93% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Beazer Homes USA vs. ACCSYS TECHPLC EO
Performance |
Timeline |
Beazer Homes USA |
ACCSYS TECHPLC EO |
Beazer Homes and ACCSYS TECHPLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Beazer Homes and ACCSYS TECHPLC
The main advantage of trading using opposite Beazer Homes and ACCSYS TECHPLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beazer Homes position performs unexpectedly, ACCSYS TECHPLC 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 ACCSYS TECHPLC will offset losses from the drop in ACCSYS TECHPLC's long position.Beazer Homes vs. TreeHouse Foods | Beazer Homes vs. Performance Food Group | Beazer Homes vs. GWILLI FOOD | Beazer Homes vs. PLANT VEDA FOODS |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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