Correlation Between AIXTRON SE and BE Semiconductor

Can any of the company-specific risk be diversified away by investing in both AIXTRON SE 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 AIXTRON SE and BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AIXTRON SE and BE Semiconductor Industries, you can compare the effects of market volatilities on AIXTRON SE 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 AIXTRON SE with a short position of BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIXTRON SE and BE Semiconductor.

Diversification Opportunities for AIXTRON SE and BE Semiconductor

0.3

Correlation Coefficient

AIXTRON SE  BE Semiconductor

Weak diversification

The 3 months correlation between AIXTRON and BESIY is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AIXTRON SE 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 AIXTRON SE 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 AIXTRON SE 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 AIXTRON SE i.e., AIXTRON SE and BE Semiconductor go up and down completely randomly.

Pair Corralation between AIXTRON SE and BE Semiconductor

Assuming the 90 days horizon AIXTRON SE is expected to under-perform the BE Semiconductor. In addition to that, AIXTRON SE is 1.18 times more volatile than BE Semiconductor Industries. It trades about -0.09 of its total potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.0 per unit of volatility. If you would invest  14,708  in BE Semiconductor Industries on September 13, 2024 and sell it today you would lose (1,339) from holding BE Semiconductor Industries or give up 9.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	89.52%
Values	Daily Returns

AIXTRON SE  vs.  BE Semiconductor Industries

AIXTRON SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AIXTRON SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

BE Semiconductor Ind

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, BE Semiconductor may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AIXTRON SE and BE Semiconductor

The main advantage of trading using opposite AIXTRON SE and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIXTRON SE 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.

The idea behind AIXTRON SE and BE Semiconductor Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.