Correlation Between BE Semiconductor and Arkema SA
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Arkema SA 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 Arkema SA 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 Arkema SA ADR, you can compare the effects of market volatilities on BE Semiconductor and Arkema SA 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 Arkema SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Arkema SA.
Diversification Opportunities for BE Semiconductor and Arkema SA
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BESIY and Arkema is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Arkema SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkema SA ADR 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 Arkema SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkema SA ADR has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Arkema SA go up and down completely randomly.
Pair Corralation between BE Semiconductor and Arkema SA
Assuming the 90 days horizon BE Semiconductor Industries is expected to under-perform the Arkema SA. In addition to that, BE Semiconductor is 2.62 times more volatile than Arkema SA ADR. It trades about -0.09 of its total potential returns per unit of risk. Arkema SA ADR is currently generating about 0.28 per unit of volatility. If you would invest 7,360 in Arkema SA ADR on November 2, 2024 and sell it today you would earn a total of 662.00 from holding Arkema SA ADR or generate 8.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Arkema SA ADR
Performance |
| Timeline |
| BE Semiconductor Ind |
| Arkema SA ADR |
BE Semiconductor and Arkema SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Arkema SA
The main advantage of trading using opposite BE Semiconductor and Arkema SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Arkema SA 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 Arkema SA will offset losses from the drop in Arkema SA'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 |
| Arkema SA vs. Akzo Nobel NV | Arkema SA vs. Avoca LLC | Arkema SA vs. AGC Inc ADR | Arkema SA vs. AirBoss of America |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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