Correlation Between BE Semiconductor and Prosus NV
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Prosus NV 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 Prosus NV 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 Prosus NV, you can compare the effects of market volatilities on BE Semiconductor and Prosus NV 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 Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Prosus NV.
Diversification Opportunities for BE Semiconductor and Prosus NV
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BESI and Prosus is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV 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 Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Prosus NV go up and down completely randomly.
Pair Corralation between BE Semiconductor and Prosus NV
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to under-perform the Prosus NV. In addition to that, BE Semiconductor is 1.44 times more volatile than Prosus NV. It trades about -0.11 of its total potential returns per unit of risk. Prosus NV is currently generating about -0.07 per unit of volatility. If you would invest 3,841 in Prosus NV on November 4, 2024 and sell it today you would lose (143.00) from holding Prosus NV or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Prosus NV
Performance |
| Timeline |
| BE Semiconductor Ind |
| Prosus NV |
BE Semiconductor and Prosus NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Prosus NV
The main advantage of trading using opposite BE Semiconductor and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Prosus NV 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 Prosus NV will offset losses from the drop in Prosus NV's long position.| BE Semiconductor vs. ASM International NV | BE Semiconductor vs. ASML Holding NV | BE Semiconductor vs. ASR Nederland NV | BE Semiconductor vs. Koninklijke Ahold Delhaize |
| Prosus NV vs. Just Eat Takeaway | Prosus NV vs. ASML Holding NV | Prosus NV vs. Koninklijke Ahold Delhaize | Prosus NV vs. Adyen NV |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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