Correlation Between BE Semiconductor and Firan Technology
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Firan Technology 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 Firan Technology 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 Firan Technology Group, you can compare the effects of market volatilities on BE Semiconductor and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Firan Technology.
Diversification Opportunities for BE Semiconductor and Firan Technology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BSI and Firan is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Firan Technology go up and down completely randomly.
Pair Corralation between BE Semiconductor and Firan Technology
Assuming the 90 days trading horizon BE Semiconductor is expected to generate 1.15 times less return on investment than Firan Technology. In addition to that, BE Semiconductor is 1.3 times more volatile than Firan Technology Group. It trades about 0.12 of its total potential returns per unit of risk. Firan Technology Group is currently generating about 0.18 per unit of volatility. If you would invest 446.00 in Firan Technology Group on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Firan Technology Group or generate 8.07% 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. Firan Technology Group
Performance |
| Timeline |
| BE Semiconductor Ind |
| Firan Technology |
BE Semiconductor and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Firan Technology
The main advantage of trading using opposite BE Semiconductor and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| BE Semiconductor vs. Japan Post Insurance | BE Semiconductor vs. Singapore Reinsurance | BE Semiconductor vs. Insurance Australia Group | BE Semiconductor vs. Liberty Broadband |
| Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc | Firan Technology vs. Apple Inc |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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