Correlation Between BE Semiconductor and Xenia Hotels
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Xenia Hotels 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 Xenia Hotels 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 Xenia Hotels Resorts, you can compare the effects of market volatilities on BE Semiconductor and Xenia Hotels 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 Xenia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Xenia Hotels.
Diversification Opportunities for BE Semiconductor and Xenia Hotels
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BSI and Xenia is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Xenia Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xenia Hotels Resorts 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 Xenia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xenia Hotels Resorts has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Xenia Hotels go up and down completely randomly.
Pair Corralation between BE Semiconductor and Xenia Hotels
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.08 times more return on investment than Xenia Hotels. However, BE Semiconductor is 1.08 times more volatile than Xenia Hotels Resorts. It trades about 0.17 of its potential returns per unit of risk. Xenia Hotels Resorts is currently generating about 0.13 per unit of risk. If you would invest 11,510 in BE Semiconductor Industries on September 13, 2024 and sell it today you would earn a total of 975.00 from holding BE Semiconductor Industries or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Xenia Hotels Resorts
Performance |
| Timeline |
| BE Semiconductor Ind |
| Xenia Hotels Resorts |
BE Semiconductor and Xenia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Xenia Hotels
The main advantage of trading using opposite BE Semiconductor and Xenia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Xenia Hotels 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 Xenia Hotels will offset losses from the drop in Xenia Hotels' long position.| BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc |
| Xenia Hotels vs. Host Hotels Resorts | Xenia Hotels vs. Sunstone Hotel Investors | Xenia Hotels vs. Summit Hotel Properties | Xenia Hotels vs. ASHFORD HOSPITTRUST |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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