Correlation Between BE Semiconductor and Saga Plc
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Saga Plc 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 Saga Plc 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 Saga plc, you can compare the effects of market volatilities on BE Semiconductor and Saga Plc 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 Saga Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Saga Plc.
Diversification Opportunities for BE Semiconductor and Saga Plc
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 0XVE and Saga is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Saga plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saga plc 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 Saga Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saga plc has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Saga Plc go up and down completely randomly.
Pair Corralation between BE Semiconductor and Saga Plc
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.58 times more return on investment than Saga Plc. However, BE Semiconductor is 1.58 times more volatile than Saga plc. It trades about 0.21 of its potential returns per unit of risk. Saga plc is currently generating about 0.03 per unit of risk. If you would invest 10,044 in BE Semiconductor Industries on September 3, 2024 and sell it today you would earn a total of 1,344 from holding BE Semiconductor Industries or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Saga plc
Performance |
| Timeline |
| BE Semiconductor Ind |
| Saga plc |
BE Semiconductor and Saga Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Saga Plc
The main advantage of trading using opposite BE Semiconductor and Saga Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Saga Plc 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 Saga Plc will offset losses from the drop in Saga Plc's long position.| BE Semiconductor vs. Catalyst Media Group | BE Semiconductor vs. CATLIN GROUP | BE Semiconductor vs. Magnora ASA | BE Semiconductor vs. RTW Venture Fund |
| Saga Plc vs. Veolia Environnement VE | Saga Plc vs. Austevoll Seafood ASA | Saga Plc vs. Aeorema Communications Plc | Saga Plc vs. Edita Food Industries |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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