Correlation Between Just Eat and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Just Eat 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 Just Eat and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Just Eat Takeaway and BE Semiconductor Industries, you can compare the effects of market volatilities on Just Eat 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 Just Eat with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Just Eat and BE Semiconductor.
Diversification Opportunities for Just Eat and BE Semiconductor
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Just and BESI is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Just Eat Takeaway 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 Just Eat 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 Just Eat Takeaway 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 Just Eat i.e., Just Eat and BE Semiconductor go up and down completely randomly.
Pair Corralation between Just Eat and BE Semiconductor
Assuming the 90 days trading horizon Just Eat Takeaway is expected to generate 1.52 times more return on investment than BE Semiconductor. However, Just Eat is 1.52 times more volatile than BE Semiconductor Industries. It trades about 0.31 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 1,120 in Just Eat Takeaway on August 30, 2024 and sell it today you would earn a total of 358.00 from holding Just Eat Takeaway or generate 31.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Just Eat Takeaway vs. BE Semiconductor Industries
Performance |
| Timeline |
| Just Eat Takeaway |
| BE Semiconductor Ind |
Just Eat and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Just Eat and BE Semiconductor
The main advantage of trading using opposite Just Eat and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Just Eat 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.| Just Eat vs. Prosus NV | Just Eat vs. Koninklijke Ahold Delhaize | Just Eat vs. Adyen NV | Just Eat vs. ASML Holding 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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