Correlation Between BE Semiconductor and Granite Construction
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Granite Construction 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 Granite Construction 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 Granite Construction, you can compare the effects of market volatilities on BE Semiconductor and Granite Construction 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 Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Granite Construction.
Diversification Opportunities for BE Semiconductor and Granite Construction
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between BSI and Granite is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction 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 Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Granite Construction go up and down completely randomly.
Pair Corralation between BE Semiconductor and Granite Construction
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to under-perform the Granite Construction. In addition to that, BE Semiconductor is 1.98 times more volatile than Granite Construction. It trades about -0.06 of its total potential returns per unit of risk. Granite Construction is currently generating about 0.0 per unit of volatility. If you would invest 8,500 in Granite Construction on November 3, 2024 and sell it today you would lose (50.00) from holding Granite Construction or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Granite Construction
Performance |
| Timeline |
| BE Semiconductor Ind |
| Granite Construction |
BE Semiconductor and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Granite Construction
The main advantage of trading using opposite BE Semiconductor and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| BE Semiconductor vs. SIVERS SEMICONDUCTORS AB | BE Semiconductor vs. NorAm Drilling AS | BE Semiconductor vs. Volkswagen AG | BE Semiconductor vs. Darden Restaurants |
| Granite Construction vs. Easy Software AG | Granite Construction vs. Magic Software Enterprises | Granite Construction vs. Take Two Interactive Software | Granite Construction vs. Mobilezone Holding AG |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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