Correlation Between BE Semiconductor and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Cairo Communication 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 Cairo Communication 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 Cairo Communication SpA, you can compare the effects of market volatilities on BE Semiconductor and Cairo Communication 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 Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Cairo Communication.
Diversification Opportunities for BE Semiconductor and Cairo Communication
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BSI and Cairo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA 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 Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Cairo Communication go up and down completely randomly.
Pair Corralation between BE Semiconductor and Cairo Communication
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 0.95 times more return on investment than Cairo Communication. However, BE Semiconductor Industries is 1.05 times less risky than Cairo Communication. It trades about 0.3 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.0 per unit of risk. If you would invest 12,515 in BE Semiconductor Industries on October 11, 2024 and sell it today you would earn a total of 1,875 from holding BE Semiconductor Industries or generate 14.98% 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. Cairo Communication SpA
Performance |
| Timeline |
| BE Semiconductor Ind |
| Cairo Communication SpA |
BE Semiconductor and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Cairo Communication
The main advantage of trading using opposite BE Semiconductor and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Cairo Communication 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 Cairo Communication will offset losses from the drop in Cairo Communication's long position.| BE Semiconductor vs. Perdoceo Education | BE Semiconductor vs. LANDSEA GREEN MANAGEMENT | BE Semiconductor vs. Perseus Mining Limited | BE Semiconductor vs. Laureate Education |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |