Correlation Between BE Semiconductor and CTT -
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and CTT - 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 CTT - 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 CTT Correios, you can compare the effects of market volatilities on BE Semiconductor and CTT - 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 CTT -. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and CTT -.
Diversification Opportunities for BE Semiconductor and CTT -
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BSI and CTT is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and CTT Correios in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTT Correios 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 CTT -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTT Correios has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and CTT - go up and down completely randomly.
Pair Corralation between BE Semiconductor and CTT -
Assuming the 90 days trading horizon BE Semiconductor is expected to generate 1.56 times less return on investment than CTT -. But when comparing it to its historical volatility, BE Semiconductor Industries is 1.07 times less risky than CTT -. It trades about 0.19 of its potential returns per unit of risk. CTT Correios is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 457.00 in CTT Correios on October 16, 2024 and sell it today you would earn a total of 69.00 from holding CTT Correios or generate 15.1% 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. CTT Correios
Performance |
| Timeline |
| BE Semiconductor Ind |
| CTT Correios |
BE Semiconductor and CTT - Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and CTT -
The main advantage of trading using opposite BE Semiconductor and CTT - positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, CTT - 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 CTT - will offset losses from the drop in CTT -'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 |
| CTT - vs. QBE Insurance Group | CTT - vs. China Reinsurance | CTT - vs. Tower Semiconductor | CTT - vs. Universal Insurance Holdings |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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