Correlation Between BE Semiconductor and Scientific Games
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and Scientific Games 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 Scientific Games 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 Scientific Games, you can compare the effects of market volatilities on BE Semiconductor and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and Scientific Games.
Diversification Opportunities for BE Semiconductor and Scientific Games
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BSI and Scientific is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Scientific Games go up and down completely randomly.
Pair Corralation between BE Semiconductor and Scientific Games
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.07 times more return on investment than Scientific Games. However, BE Semiconductor is 1.07 times more volatile than Scientific Games. It trades about 0.22 of its potential returns per unit of risk. Scientific Games is currently generating about 0.07 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 | 95.65% |
| Values | Daily Returns |
BE Semiconductor Industries vs. Scientific Games
Performance |
| Timeline |
| BE Semiconductor Ind |
| Scientific Games |
BE Semiconductor and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and Scientific Games
The main advantage of trading using opposite BE Semiconductor and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' long position.| BE Semiconductor vs. CeoTronics AG | BE Semiconductor vs. AGF Management Limited | BE Semiconductor vs. Cogent Communications Holdings | BE Semiconductor vs. KRISPY KREME DL 01 |
| Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc | Scientific Games vs. Apple Inc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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