Correlation Between BE Semiconductor and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Ebro Foods 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 BE Semiconductor and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Semiconductor Industries and Ebro Foods, you can compare the effects of market volatilities on BE Semiconductor and Ebro Foods 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 BE Semiconductor with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Ebro Foods.
Diversification Opportunities for BE Semiconductor and Ebro Foods
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0XVE and Ebro is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and BE Semiconductor 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 BE Semiconductor Industries are associated (or correlated) with Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Ebro Foods go up and down completely randomly.
Pair Corralation between BE Semiconductor and Ebro Foods
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 4.2 times more return on investment than Ebro Foods. However, BE Semiconductor is 4.2 times more volatile than Ebro Foods. It trades about 0.32 of its potential returns per unit of risk. Ebro Foods is currently generating about -0.03 per unit of risk. If you would invest 12,740 in BE Semiconductor Industries on October 20, 2024 and sell it today you would earn a total of 1,948 from holding BE Semiconductor Industries or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Ebro Foods
Performance |
| Timeline |
| BE Semiconductor Ind |
| Ebro Foods |
BE Semiconductor and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Ebro Foods
The main advantage of trading using opposite BE Semiconductor and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| BE Semiconductor vs. Walmart | BE Semiconductor vs. BYD Co | BE Semiconductor vs. Volkswagen AG | BE Semiconductor vs. Volkswagen AG Non Vtg |
| Ebro Foods vs. Xeros Technology Group | Ebro Foods vs. Alfa Financial Software | Ebro Foods vs. Axway Software SA | Ebro Foods vs. Taiwan Semiconductor Manufacturing |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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