Correlation Between Prosus NV and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Prosus NV 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 Prosus NV and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosus NV and BE Semiconductor Industries, you can compare the effects of market volatilities on Prosus NV 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 Prosus NV with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosus NV and BE Semiconductor.
Diversification Opportunities for Prosus NV and BE Semiconductor
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prosus and BESI is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Prosus NV 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 Prosus NV 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 Prosus NV 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 Prosus NV i.e., Prosus NV and BE Semiconductor go up and down completely randomly.
Pair Corralation between Prosus NV and BE Semiconductor
Assuming the 90 days trading horizon Prosus NV is expected to under-perform the BE Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Prosus NV is 2.03 times less risky than BE Semiconductor. The stock trades about -0.14 of its potential returns per unit of risk. The BE Semiconductor Industries is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,450 in BE Semiconductor Industries on August 29, 2024 and sell it today you would earn a total of 640.00 from holding BE Semiconductor Industries or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosus NV vs. BE Semiconductor Industries
Performance |
| Timeline |
| Prosus NV |
| BE Semiconductor Ind |
Prosus NV and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosus NV and BE Semiconductor
The main advantage of trading using opposite Prosus NV and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosus NV 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.| Prosus NV vs. Just Eat Takeaway | Prosus NV vs. ASML Holding NV | Prosus NV vs. Koninklijke Ahold Delhaize | Prosus NV vs. Adyen NV |
| BE Semiconductor vs. ASM International NV | BE Semiconductor vs. ASML Holding NV | BE Semiconductor vs. ASR Nederland NV | BE Semiconductor vs. Koninklijke Ahold Delhaize |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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