Correlation Between Kingdee International and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Kingdee International 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 Kingdee International and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingdee International Software and BE Semiconductor Industries, you can compare the effects of market volatilities on Kingdee International 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 Kingdee International with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and BE Semiconductor.
Diversification Opportunities for Kingdee International and BE Semiconductor
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kingdee and BSI is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software 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 Kingdee International 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 Kingdee International Software 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 Kingdee International i.e., Kingdee International and BE Semiconductor go up and down completely randomly.
Pair Corralation between Kingdee International and BE Semiconductor
Assuming the 90 days trading horizon Kingdee International Software is expected to under-perform the BE Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Kingdee International Software is 1.06 times less risky than BE Semiconductor. The stock trades about -0.01 of its potential returns per unit of risk. The BE Semiconductor Industries is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 13,440 in BE Semiconductor Industries on October 24, 2024 and sell it today you would earn a total of 1,125 from holding BE Semiconductor Industries or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingdee International Software vs. BE Semiconductor Industries
Performance |
| Timeline |
| Kingdee International |
| BE Semiconductor Ind |
Kingdee International and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and BE Semiconductor
The main advantage of trading using opposite Kingdee International and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International 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.| Kingdee International vs. MOVIE GAMES SA | Kingdee International vs. CONTAGIOUS GAMING INC | Kingdee International vs. DETALION GAMES SA | Kingdee International vs. Firan Technology Group |
| BE Semiconductor vs. T Mobile | BE Semiconductor vs. Mobilezone Holding AG | BE Semiconductor vs. MOBILE FACTORY INC | BE Semiconductor vs. Kingdee International 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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