Correlation Between BE Semiconductor and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Caledonia Mining 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 Caledonia Mining 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 Caledonia Mining, you can compare the effects of market volatilities on BE Semiconductor and Caledonia Mining 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 Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Caledonia Mining.
Diversification Opportunities for BE Semiconductor and Caledonia Mining
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 0XVE and Caledonia is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining 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 Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Caledonia Mining go up and down completely randomly.
Pair Corralation between BE Semiconductor and Caledonia Mining
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.24 times more return on investment than Caledonia Mining. However, BE Semiconductor is 1.24 times more volatile than Caledonia Mining. It trades about 0.08 of its potential returns per unit of risk. Caledonia Mining is currently generating about 0.0 per unit of risk. If you would invest 5,447 in BE Semiconductor Industries on September 20, 2024 and sell it today you would earn a total of 7,641 from holding BE Semiconductor Industries or generate 140.28% 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. Caledonia Mining
Performance |
| Timeline |
| BE Semiconductor Ind |
| Caledonia Mining |
BE Semiconductor and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Caledonia Mining
The main advantage of trading using opposite BE Semiconductor and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Caledonia Mining 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 Caledonia Mining will offset losses from the drop in Caledonia Mining's long position.| BE Semiconductor vs. Diversified Energy | BE Semiconductor vs. Intuitive Investments Group | BE Semiconductor vs. Smithson Investment Trust | BE Semiconductor vs. Cincinnati Financial Corp |
| Caledonia Mining vs. BE Semiconductor Industries | Caledonia Mining vs. Jacquet Metal Service | Caledonia Mining vs. Panther Metals PLC | Caledonia Mining vs. Darden Restaurants |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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