Correlation Between Materialise and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Materialise and BE Semiconductor 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 Materialise and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and BE Semiconductor Industries, you can compare the effects of market volatilities on Materialise and BE Semiconductor 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 Materialise with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and BE Semiconductor.
Diversification Opportunities for Materialise and BE Semiconductor
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Materialise and BSI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind and Materialise 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 Materialise NV are associated (or correlated) with BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of Materialise i.e., Materialise and BE Semiconductor go up and down completely randomly.
Pair Corralation between Materialise and BE Semiconductor
Assuming the 90 days trading horizon Materialise NV is expected to under-perform the BE Semiconductor. In addition to that, Materialise is 1.36 times more volatile than BE Semiconductor Industries. It trades about -0.1 of its total potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.31 per unit of volatility. If you would invest 12,485 in BE Semiconductor Industries on October 12, 2024 and sell it today you would earn a total of 1,905 from holding BE Semiconductor Industries or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. BE Semiconductor Industries
Performance |
| Timeline |
| Materialise NV |
| BE Semiconductor Ind |
Materialise and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and BE Semiconductor
The main advantage of trading using opposite Materialise and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, BE Semiconductor 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.| Materialise vs. AOI Electronics Co | Materialise vs. FORWARD AIR P | Materialise vs. WIZZ AIR HLDGUNSPADR4 | Materialise vs. CHINA SOUTHN AIR H |
| BE Semiconductor vs. Perdoceo Education | BE Semiconductor vs. LANDSEA GREEN MANAGEMENT | BE Semiconductor vs. Perseus Mining Limited | BE Semiconductor vs. Laureate Education |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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