Correlation Between BE Semiconductor and AIXTRON SE
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and AIXTRON SE 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 AIXTRON SE 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 AIXTRON SE, you can compare the effects of market volatilities on BE Semiconductor and AIXTRON SE 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 AIXTRON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and AIXTRON SE.
Diversification Opportunities for BE Semiconductor and AIXTRON SE
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between BESIY and AIXTRON is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and AIXTRON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIXTRON SE 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 AIXTRON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIXTRON SE has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and AIXTRON SE go up and down completely randomly.
Pair Corralation between BE Semiconductor and AIXTRON SE
Assuming the 90 days horizon BE Semiconductor Industries is expected to generate 0.83 times more return on investment than AIXTRON SE. However, BE Semiconductor Industries is 1.21 times less risky than AIXTRON SE. It trades about 0.23 of its potential returns per unit of risk. AIXTRON SE is currently generating about -0.08 per unit of risk. If you would invest 13,872 in BE Semiconductor Industries on October 22, 2024 and sell it today you would earn a total of 1,465 from holding BE Semiconductor Industries or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. AIXTRON SE
Performance |
| Timeline |
| BE Semiconductor Ind |
| AIXTRON SE |
BE Semiconductor and AIXTRON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and AIXTRON SE
The main advantage of trading using opposite BE Semiconductor and AIXTRON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, AIXTRON SE 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 AIXTRON SE will offset losses from the drop in AIXTRON SE's long position.| BE Semiconductor vs. Lasertec | BE Semiconductor vs. Tokyo Electron Ltd | BE Semiconductor vs. Asm Pacific Technology | BE Semiconductor vs. Sumco Corp ADR |
| AIXTRON SE vs. Sumco Corp ADR | AIXTRON SE vs. Disco Corp ADR | AIXTRON SE vs. Tokyo Electron | AIXTRON SE vs. Asm Pacific Technology |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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