Correlation Between BE Semiconductor and BANK CENTRAL
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and BANK CENTRAL 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 BANK CENTRAL 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 BANK CENTRAL ASIA, you can compare the effects of market volatilities on BE Semiconductor and BANK CENTRAL 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 BANK CENTRAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and BANK CENTRAL.
Diversification Opportunities for BE Semiconductor and BANK CENTRAL
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BSI and BANK is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and BANK CENTRAL ASIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK CENTRAL ASIA 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 BANK CENTRAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK CENTRAL ASIA has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and BANK CENTRAL go up and down completely randomly.
Pair Corralation between BE Semiconductor and BANK CENTRAL
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.59 times more return on investment than BANK CENTRAL. However, BE Semiconductor is 1.59 times more volatile than BANK CENTRAL ASIA. It trades about 0.19 of its potential returns per unit of risk. BANK CENTRAL ASIA is currently generating about -0.04 per unit of risk. If you would invest 12,720 in BE Semiconductor Industries on October 16, 2024 and sell it today you would earn a total of 1,170 from holding BE Semiconductor Industries or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. BANK CENTRAL ASIA
Performance |
| Timeline |
| BE Semiconductor Ind |
| BANK CENTRAL ASIA |
BE Semiconductor and BANK CENTRAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and BANK CENTRAL
The main advantage of trading using opposite BE Semiconductor and BANK CENTRAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, BANK CENTRAL 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 BANK CENTRAL will offset losses from the drop in BANK CENTRAL's long position.| BE Semiconductor vs. Penta Ocean Construction Co | BE Semiconductor vs. WT OFFSHORE | BE Semiconductor vs. Hanison Construction Holdings | BE Semiconductor vs. TITAN MACHINERY |
| BANK CENTRAL vs. Hua Hong Semiconductor | BANK CENTRAL vs. BE Semiconductor Industries | BANK CENTRAL vs. Tower Semiconductor | BANK CENTRAL vs. MPH Health Care |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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