Correlation Between BE Semiconductor and Capgemini
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Capgemini 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 Capgemini 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 Capgemini SE, you can compare the effects of market volatilities on BE Semiconductor and Capgemini 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 Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Capgemini.
Diversification Opportunities for BE Semiconductor and Capgemini
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BSI and Capgemini is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE 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 Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Capgemini go up and down completely randomly.
Pair Corralation between BE Semiconductor and Capgemini
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.53 times more return on investment than Capgemini. However, BE Semiconductor is 1.53 times more volatile than Capgemini SE. It trades about 0.23 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.35 per unit of risk. If you would invest 9,792 in BE Semiconductor Industries on August 25, 2024 and sell it today you would earn a total of 1,493 from holding BE Semiconductor Industries or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Capgemini SE
Performance |
| Timeline |
| BE Semiconductor Ind |
| Capgemini SE |
BE Semiconductor and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Capgemini
The main advantage of trading using opposite BE Semiconductor and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Capgemini 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 Capgemini will offset losses from the drop in Capgemini's long position.| BE Semiconductor vs. AIR LIQUIDE ADR | BE Semiconductor vs. Wizz Air Holdings | BE Semiconductor vs. PICKN PAY STORES | BE Semiconductor vs. WIZZ AIR HLDGUNSPADR4 |
| Capgemini vs. Japan Medical Dynamic | Capgemini vs. Apollo Medical Holdings | Capgemini vs. BE Semiconductor Industries | Capgemini vs. Apyx Medical Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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