Correlation Between Compal Electronics and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Compal Electronics and BE Semiconductor 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 Compal Electronics and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compal Electronics GDR and BE Semiconductor Industries, you can compare the effects of market volatilities on Compal Electronics and BE Semiconductor 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 Compal Electronics with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compal Electronics and BE Semiconductor.
Diversification Opportunities for Compal Electronics and BE Semiconductor
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compal and 0XVE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Compal Electronics GDR and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind and Compal Electronics 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 Compal Electronics GDR are associated (or correlated) with BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of Compal Electronics i.e., Compal Electronics and BE Semiconductor go up and down completely randomly.
Pair Corralation between Compal Electronics and BE Semiconductor
If you would invest 12,552 in BE Semiconductor Industries on October 9, 2024 and sell it today you would earn a total of 1,658 from holding BE Semiconductor Industries or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Compal Electronics GDR vs. BE Semiconductor Industries
Performance |
| Timeline |
| Compal Electronics GDR |
| BE Semiconductor Ind |
Compal Electronics and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compal Electronics and BE Semiconductor
The main advantage of trading using opposite Compal Electronics and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compal Electronics position performs unexpectedly, BE Semiconductor 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.| Compal Electronics vs. Coeur Mining | Compal Electronics vs. Gamma Communications PLC | Compal Electronics vs. Zegona Communications Plc | Compal Electronics vs. Team Internet Group |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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