Correlation Between BE Semiconductor and CeoTronics
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and CeoTronics 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 CeoTronics 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 CeoTronics AG, you can compare the effects of market volatilities on BE Semiconductor and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and CeoTronics.
Diversification Opportunities for BE Semiconductor and CeoTronics
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BSI and CeoTronics is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and CeoTronics go up and down completely randomly.
Pair Corralation between BE Semiconductor and CeoTronics
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.3 times more return on investment than CeoTronics. However, BE Semiconductor is 1.3 times more volatile than CeoTronics AG. It trades about 0.12 of its potential returns per unit of risk. CeoTronics AG is currently generating about -0.03 per unit of risk. If you would invest 10,500 in BE Semiconductor Industries on August 29, 2024 and sell it today you would earn a total of 690.00 from holding BE Semiconductor Industries or generate 6.57% 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. CeoTronics AG
Performance |
| Timeline |
| BE Semiconductor Ind |
| CeoTronics AG |
BE Semiconductor and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and CeoTronics
The main advantage of trading using opposite BE Semiconductor and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| BE Semiconductor vs. Japan Post Insurance | BE Semiconductor vs. Singapore Reinsurance | BE Semiconductor vs. Insurance Australia Group | BE Semiconductor vs. Liberty Broadband |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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