Correlation Between BE Semiconductor and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Alfa Financial 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 Alfa Financial 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 Alfa Financial Software, you can compare the effects of market volatilities on BE Semiconductor and Alfa Financial 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 Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Alfa Financial.
Diversification Opportunities for BE Semiconductor and Alfa Financial
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between BSI and Alfa is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Alfa Financial go up and down completely randomly.
Pair Corralation between BE Semiconductor and Alfa Financial
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.3 times more return on investment than Alfa Financial. However, BE Semiconductor is 1.3 times more volatile than Alfa Financial Software. It trades about 0.07 of its potential returns per unit of risk. Alfa Financial Software is currently generating about 0.05 per unit of risk. If you would invest 6,809 in BE Semiconductor Industries on October 16, 2024 and sell it today you would earn a total of 7,491 from holding BE Semiconductor Industries or generate 110.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Alfa Financial Software
Performance |
| Timeline |
| BE Semiconductor Ind |
| Alfa Financial Software |
BE Semiconductor and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Alfa Financial
The main advantage of trading using opposite BE Semiconductor and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| BE Semiconductor vs. TRAINLINE PLC LS | BE Semiconductor vs. PARKEN Sport Entertainment | BE Semiconductor vs. CSSC Offshore Marine | BE Semiconductor vs. Texas Roadhouse |
| Alfa Financial vs. Zurich Insurance Group | Alfa Financial vs. REVO INSURANCE SPA | Alfa Financial vs. BE Semiconductor Industries | Alfa Financial vs. AM EAGLE OUTFITTERS |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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