Correlation Between BE Semiconductor and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Sabre Insurance 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 Sabre Insurance 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 Sabre Insurance Group, you can compare the effects of market volatilities on BE Semiconductor and Sabre Insurance 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 Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Sabre Insurance.
Diversification Opportunities for BE Semiconductor and Sabre Insurance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0XVE and Sabre is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance Group 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 Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Sabre Insurance go up and down completely randomly.
Pair Corralation between BE Semiconductor and Sabre Insurance
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.61 times more return on investment than Sabre Insurance. However, BE Semiconductor is 1.61 times more volatile than Sabre Insurance Group. It trades about 0.06 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.05 per unit of risk. If you would invest 6,501 in BE Semiconductor Industries on October 30, 2024 and sell it today you would earn a total of 6,062 from holding BE Semiconductor Industries or generate 93.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Sabre Insurance Group
Performance |
| Timeline |
| BE Semiconductor Ind |
| Sabre Insurance Group |
BE Semiconductor and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Sabre Insurance
The main advantage of trading using opposite BE Semiconductor and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Sabre Insurance 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 Sabre Insurance will offset losses from the drop in Sabre Insurance's long position.| BE Semiconductor vs. Fulcrum Metals PLC | BE Semiconductor vs. Wheaton Precious Metals | BE Semiconductor vs. URU Metals | BE Semiconductor vs. Eastinco Mining Exploration |
| Sabre Insurance vs. Erste Group Bank | Sabre Insurance vs. Virgin Wines UK | Sabre Insurance vs. Synchrony Financial | Sabre Insurance vs. Ecclesiastical Insurance Office |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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