Correlation Between ASM International and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both ASM International 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 ASM International and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM International NV and BE Semiconductor Industries, you can compare the effects of market volatilities on ASM International 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 ASM International with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM International and BE Semiconductor.
Diversification Opportunities for ASM International and BE Semiconductor
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASM and BESI is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV 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 ASM International 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 ASM International NV 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 ASM International i.e., ASM International and BE Semiconductor go up and down completely randomly.
Pair Corralation between ASM International and BE Semiconductor
Assuming the 90 days trading horizon ASM International NV is expected to under-perform the BE Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, ASM International NV is 1.19 times less risky than BE Semiconductor. The stock trades about -0.02 of its potential returns per unit of risk. The BE Semiconductor Industries is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 10,030 in BE Semiconductor Industries on August 24, 2024 and sell it today you would earn a total of 1,250 from holding BE Semiconductor Industries or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM International NV vs. BE Semiconductor Industries
Performance |
| Timeline |
| ASM International |
| BE Semiconductor Ind |
ASM International and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM International and BE Semiconductor
The main advantage of trading using opposite ASM International and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM International 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.| ASM International vs. BE Semiconductor Industries | ASM International vs. ASML Holding NV | ASM International vs. NN Group NV | ASM International vs. Aalberts Industries NV |
| BE Semiconductor vs. ASM International NV | BE Semiconductor vs. ASML Holding NV | BE Semiconductor vs. ASR Nederland NV | BE Semiconductor vs. Koninklijke Ahold Delhaize |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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