Correlation Between BE Semiconductor and Hermès International
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Hermès International 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 Hermès International 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 Herms International Socit, you can compare the effects of market volatilities on BE Semiconductor and Hermès International 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 Hermès International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Hermès International.
Diversification Opportunities for BE Semiconductor and Hermès International
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BSI and Hermès is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Herms International Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Herms International Socit 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 Hermès International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Herms International Socit has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Hermès International go up and down completely randomly.
Pair Corralation between BE Semiconductor and Hermès International
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to under-perform the Hermès International. In addition to that, BE Semiconductor is 3.18 times more volatile than Herms International Socit. It trades about -0.19 of its total potential returns per unit of risk. Herms International Socit is currently generating about 0.57 per unit of volatility. If you would invest 234,400 in Herms International Socit on November 6, 2024 and sell it today you would earn a total of 36,600 from holding Herms International Socit or generate 15.61% 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. Herms International Socit
Performance |
| Timeline |
| BE Semiconductor Ind |
| Herms International Socit |
BE Semiconductor and Hermès International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Hermès International
The main advantage of trading using opposite BE Semiconductor and Hermès International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Hermès International 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 Hermès International will offset losses from the drop in Hermès International's long position.| BE Semiconductor vs. BOSTON BEER A | BE Semiconductor vs. CHINA TONTINE WINES | BE Semiconductor vs. VIRGIN WINES UK | BE Semiconductor vs. BRIT AMER TOBACCO |
| Hermès International vs. ZURICH INSURANCE GROUP | Hermès International vs. Aya Gold Silver | Hermès International vs. Direct Line Insurance | Hermès International vs. United 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |