Correlation Between Assa Abloy and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Assa Abloy 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 Assa Abloy and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assa Abloy AB and BE Semiconductor Industries, you can compare the effects of market volatilities on Assa Abloy 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 Assa Abloy with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assa Abloy and BE Semiconductor.
Diversification Opportunities for Assa Abloy and BE Semiconductor
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Assa and BESIY is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Assa Abloy AB 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 Assa Abloy 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 Assa Abloy AB 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 Assa Abloy i.e., Assa Abloy and BE Semiconductor go up and down completely randomly.
Pair Corralation between Assa Abloy and BE Semiconductor
Assuming the 90 days horizon Assa Abloy AB is expected to generate 0.34 times more return on investment than BE Semiconductor. However, Assa Abloy AB is 2.98 times less risky than BE Semiconductor. It trades about 0.16 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about -0.09 per unit of risk. If you would invest 1,458 in Assa Abloy AB on November 2, 2024 and sell it today you would earn a total of 63.00 from holding Assa Abloy AB or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Assa Abloy AB vs. BE Semiconductor Industries
Performance |
| Timeline |
| Assa Abloy AB |
| BE Semiconductor Ind |
Assa Abloy and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assa Abloy and BE Semiconductor
The main advantage of trading using opposite Assa Abloy and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assa Abloy 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.| Assa Abloy vs. Atlas Copco AB | Assa Abloy vs. Carlsberg AS | Assa Abloy vs. DSV Panalpina AS | Assa Abloy vs. Alfa Laval AB |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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