Correlation Between BE Semiconductor and Advantest
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Advantest 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 Advantest 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 Advantest, you can compare the effects of market volatilities on BE Semiconductor and Advantest 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 Advantest. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Advantest.
Diversification Opportunities for BE Semiconductor and Advantest
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BESIY and Advantest is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Advantest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantest 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 Advantest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantest has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Advantest go up and down completely randomly.
Pair Corralation between BE Semiconductor and Advantest
Assuming the 90 days horizon BE Semiconductor is expected to generate 4.51 times less return on investment than Advantest. But when comparing it to its historical volatility, BE Semiconductor Industries is 2.0 times less risky than Advantest. It trades about 0.04 of its potential returns per unit of risk. Advantest is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,258 in Advantest on December 5, 2024 and sell it today you would earn a total of 3,197 from holding Advantest or generate 141.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 42.97% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Advantest
Performance |
| Timeline |
| BE Semiconductor Ind |
| Advantest |
BE Semiconductor and Advantest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Advantest
The main advantage of trading using opposite BE Semiconductor and Advantest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Advantest 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 Advantest will offset losses from the drop in Advantest's long position.| BE Semiconductor vs. Lasertec | ||
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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