Correlation Between Argo Group and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Argo Group 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 Argo Group and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Group Limited and BE Semiconductor Industries, you can compare the effects of market volatilities on Argo Group 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 Argo Group with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Group and BE Semiconductor.
Diversification Opportunities for Argo Group and BE Semiconductor
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Argo and 0XVE is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Argo Group Limited 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 Argo Group 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 Argo Group Limited 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 Argo Group i.e., Argo Group and BE Semiconductor go up and down completely randomly.
Pair Corralation between Argo Group and BE Semiconductor
Assuming the 90 days trading horizon Argo Group is expected to generate 30.19 times less return on investment than BE Semiconductor. But when comparing it to its historical volatility, Argo Group Limited is 1.51 times less risky than BE Semiconductor. It trades about 0.01 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 10,143 in BE Semiconductor Industries on September 2, 2024 and sell it today you would earn a total of 1,245 from holding BE Semiconductor Industries or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Group Limited vs. BE Semiconductor Industries
Performance |
| Timeline |
| Argo Group Limited |
| BE Semiconductor Ind |
Argo Group and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Group and BE Semiconductor
The main advantage of trading using opposite Argo Group and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Group 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.| Argo Group vs. Allianz Technology Trust | Argo Group vs. Uber Technologies | Argo Group vs. UNIQA Insurance Group | Argo Group vs. Lendinvest PLC |
| BE Semiconductor vs. Uniper SE | BE Semiconductor vs. Mulberry Group PLC | BE Semiconductor vs. London Security Plc | BE Semiconductor vs. Triad Group PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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