Correlation Between BE Semiconductor and WHIRLPOOL
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and WHIRLPOOL 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 WHIRLPOOL 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 WHIRLPOOL, you can compare the effects of market volatilities on BE Semiconductor and WHIRLPOOL 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 WHIRLPOOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and WHIRLPOOL.
Diversification Opportunities for BE Semiconductor and WHIRLPOOL
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BSI and WHIRLPOOL is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and WHIRLPOOL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHIRLPOOL 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 WHIRLPOOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHIRLPOOL has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and WHIRLPOOL go up and down completely randomly.
Pair Corralation between BE Semiconductor and WHIRLPOOL
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 0.82 times more return on investment than WHIRLPOOL. However, BE Semiconductor Industries is 1.21 times less risky than WHIRLPOOL. It trades about 0.25 of its potential returns per unit of risk. WHIRLPOOL is currently generating about 0.21 per unit of risk. If you would invest 10,965 in BE Semiconductor Industries on September 12, 2024 and sell it today you would earn a total of 1,550 from holding BE Semiconductor Industries or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BE Semiconductor Industries vs. WHIRLPOOL
Performance |
| Timeline |
| BE Semiconductor Ind |
| WHIRLPOOL |
BE Semiconductor and WHIRLPOOL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BE Semiconductor and WHIRLPOOL
The main advantage of trading using opposite BE Semiconductor and WHIRLPOOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, WHIRLPOOL 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 WHIRLPOOL will offset losses from the drop in WHIRLPOOL's long position.| BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc |
| WHIRLPOOL vs. BE Semiconductor Industries | WHIRLPOOL vs. Taiwan Semiconductor Manufacturing | WHIRLPOOL vs. Heidelberg Materials AG | WHIRLPOOL vs. EAGLE MATERIALS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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