Correlation Between Arkema SA and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Arkema SA 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 Arkema SA and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arkema SA ADR and BE Semiconductor Industries, you can compare the effects of market volatilities on Arkema SA 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 Arkema SA with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arkema SA and BE Semiconductor.
Diversification Opportunities for Arkema SA and BE Semiconductor
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Arkema and BESIY is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Arkema SA ADR 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 Arkema SA 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 Arkema SA ADR 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 Arkema SA i.e., Arkema SA and BE Semiconductor go up and down completely randomly.
Pair Corralation between Arkema SA and BE Semiconductor
Assuming the 90 days horizon Arkema SA ADR is expected to under-perform the BE Semiconductor. But the pink sheet apears to be less risky and, when comparing its historical volatility, Arkema SA ADR is 1.66 times less risky than BE Semiconductor. The pink sheet trades about -0.01 of its potential returns per unit of risk. The BE Semiconductor Industries is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,599 in BE Semiconductor Industries on October 21, 2024 and sell it today you would earn a total of 8,738 from holding BE Semiconductor Industries or generate 132.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Arkema SA ADR vs. BE Semiconductor Industries
Performance |
| Timeline |
| Arkema SA ADR |
| BE Semiconductor Ind |
Arkema SA and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arkema SA and BE Semiconductor
The main advantage of trading using opposite Arkema SA and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arkema SA 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.| Arkema SA vs. Akzo Nobel NV | Arkema SA vs. Avoca LLC | Arkema SA vs. AGC Inc ADR | Arkema SA vs. AirBoss of America |
| BE Semiconductor vs. Lasertec | BE Semiconductor vs. Tokyo Electron Ltd | BE Semiconductor vs. Asm Pacific Technology | BE Semiconductor vs. Sumco Corp ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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