Correlation Between BEAZER HOMES and Siemens Healthineers

Can any of the company-specific risk be diversified away by investing in both BEAZER HOMES and Siemens Healthineers 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 Siemens Healthineers 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 Siemens Healthineers AG, you can compare the effects of market volatilities on BEAZER HOMES and Siemens Healthineers 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 Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of BEAZER HOMES and Siemens Healthineers.

Diversification Opportunities for BEAZER HOMES and Siemens Healthineers

0.22

Correlation Coefficient

BEAZER HOMES  Siemens Healthineers

Modest diversification

The 3 months correlation between BEAZER and Siemens is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BEAZER HOMES USA and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers 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 Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of BEAZER HOMES i.e., BEAZER HOMES and Siemens Healthineers go up and down completely randomly.

Pair Corralation between BEAZER HOMES and Siemens Healthineers

Assuming the 90 days trading horizon BEAZER HOMES USA is expected to generate 2.22 times more return on investment than Siemens Healthineers. However, BEAZER HOMES is 2.22 times more volatile than Siemens Healthineers AG. It trades about 0.17 of its potential returns per unit of risk. Siemens Healthineers AG is currently generating about -0.02 per unit of risk. If you would invest  1,650  in BEAZER HOMES USA on April 25, 2025 and sell it today you would earn a total of  510.00  from holding BEAZER HOMES USA or generate 30.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BEAZER HOMES USA  vs.  Siemens Healthineers AG

BEAZER HOMES USA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BEAZER HOMES USA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BEAZER HOMES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Siemens Healthineers

Risk-Adjusted Performance

Very Weak

Over the last 90 days Siemens Healthineers AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Siemens Healthineers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BEAZER HOMES and Siemens Healthineers

The main advantage of trading using opposite BEAZER HOMES and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BEAZER HOMES position performs unexpectedly, Siemens Healthineers 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 Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.

The idea behind BEAZER HOMES USA and Siemens Healthineers AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.