Correlation Between BE Semiconductor and Materialise
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Materialise 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 Materialise 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 Materialise NV, you can compare the effects of market volatilities on BE Semiconductor and Materialise 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 Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Materialise.
Diversification Opportunities for BE Semiconductor and Materialise
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BSI and Materialise is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise 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 Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Materialise go up and down completely randomly.
Pair Corralation between BE Semiconductor and Materialise
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 0.73 times more return on investment than Materialise. However, BE Semiconductor Industries is 1.36 times less risky than Materialise. It trades about 0.31 of its potential returns per unit of risk. Materialise NV is currently generating about -0.1 per unit of risk. If you would invest 12,485 in BE Semiconductor Industries on October 12, 2024 and sell it today you would earn a total of 1,905 from holding BE Semiconductor Industries or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Materialise NV
Performance |
| Timeline |
| BE Semiconductor Ind |
| Materialise NV |
BE Semiconductor and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Materialise
The main advantage of trading using opposite BE Semiconductor and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| BE Semiconductor vs. Perdoceo Education | BE Semiconductor vs. LANDSEA GREEN MANAGEMENT | BE Semiconductor vs. Perseus Mining Limited | BE Semiconductor vs. Laureate Education |
| Materialise vs. AOI Electronics Co | Materialise vs. FORWARD AIR P | Materialise vs. WIZZ AIR HLDGUNSPADR4 | Materialise vs. CHINA SOUTHN AIR H |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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