Correlation Between BE Semiconductor and BROADPEAK
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and BROADPEAK 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 BROADPEAK 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 BROADPEAK SA EO, you can compare the effects of market volatilities on BE Semiconductor and BROADPEAK 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 BROADPEAK. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and BROADPEAK.
Diversification Opportunities for BE Semiconductor and BROADPEAK
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BSI and BROADPEAK is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and BROADPEAK SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADPEAK SA EO 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 BROADPEAK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADPEAK SA EO has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and BROADPEAK go up and down completely randomly.
Pair Corralation between BE Semiconductor and BROADPEAK
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 2.42 times more return on investment than BROADPEAK. However, BE Semiconductor is 2.42 times more volatile than BROADPEAK SA EO. It trades about 0.19 of its potential returns per unit of risk. BROADPEAK SA EO is currently generating about 0.16 per unit of risk. If you would invest 12,720 in BE Semiconductor Industries on October 17, 2024 and sell it today you would earn a total of 1,170 from holding BE Semiconductor Industries or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. BROADPEAK SA EO
Performance |
| Timeline |
| BE Semiconductor Ind |
| BROADPEAK SA EO |
BE Semiconductor and BROADPEAK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and BROADPEAK
The main advantage of trading using opposite BE Semiconductor and BROADPEAK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, BROADPEAK 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 BROADPEAK will offset losses from the drop in BROADPEAK's long position.| BE Semiconductor vs. Penta Ocean Construction Co | BE Semiconductor vs. WT OFFSHORE | BE Semiconductor vs. Hanison Construction Holdings | BE Semiconductor vs. TITAN MACHINERY |
| BROADPEAK vs. Magic Software Enterprises | BROADPEAK vs. SCIENCE IN SPORT | BROADPEAK vs. MAGIC SOFTWARE ENTR | BROADPEAK vs. Alfa Financial Software |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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