Correlation Between Intel and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and BE Semiconductor Industries, you can compare the effects of market volatilities on Intel 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 Intel with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and BE Semiconductor.
Diversification Opportunities for Intel and BE Semiconductor
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Intel and BSI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Intel 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 Intel 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 Intel 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 Intel i.e., Intel and BE Semiconductor go up and down completely randomly.
Pair Corralation between Intel and BE Semiconductor
Assuming the 90 days trading horizon Intel is expected to generate 1.33 times more return on investment than BE Semiconductor. However, Intel is 1.33 times more volatile than BE Semiconductor Industries. It trades about 0.1 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.1 per unit of risk. If you would invest 2,081 in Intel on August 31, 2024 and sell it today you would earn a total of 152.00 from holding Intel or generate 7.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. BE Semiconductor Industries
Performance |
| Timeline |
| Intel |
| BE Semiconductor Ind |
Intel and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and BE Semiconductor
The main advantage of trading using opposite Intel and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.| Intel vs. BE Semiconductor Industries | Intel vs. PKSHA TECHNOLOGY INC | Intel vs. Check Point Software | Intel vs. X Fab Silicon |
| BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc | BE Semiconductor vs. Apple Inc | BE Semiconductor 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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