Correlation Between BE Semiconductor and Auckland International
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Auckland International 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 Auckland International 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 Auckland International Airport, you can compare the effects of market volatilities on BE Semiconductor and Auckland International 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 Auckland International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Auckland International.
Diversification Opportunities for BE Semiconductor and Auckland International
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BESIY and Auckland is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Auckland International Airport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auckland International 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 Auckland International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auckland International has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Auckland International go up and down completely randomly.
Pair Corralation between BE Semiconductor and Auckland International
Assuming the 90 days horizon BE Semiconductor Industries is expected to generate 1.26 times more return on investment than Auckland International. However, BE Semiconductor is 1.26 times more volatile than Auckland International Airport. It trades about 0.07 of its potential returns per unit of risk. Auckland International Airport is currently generating about 0.0 per unit of risk. If you would invest 6,599 in BE Semiconductor Industries on October 21, 2024 and sell it today you would earn a total of 8,738 from holding BE Semiconductor Industries or generate 132.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.11% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Auckland International Airport
Performance |
| Timeline |
| BE Semiconductor Ind |
| Auckland International |
BE Semiconductor and Auckland International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Auckland International
The main advantage of trading using opposite BE Semiconductor and Auckland International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Auckland International 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 Auckland International will offset losses from the drop in Auckland International'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 |
| Auckland International vs. Aeroports de Paris | Auckland International vs. Aena SME SA | Auckland International vs. Aena SME SA | Auckland International vs. Airports of Thailand |
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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