Correlation Between BE Semiconductor and IMCD NV
Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and IMCD NV 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 BE Semiconductor and IMCD NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BE Semiconductor Industries and IMCD NV, you can compare the effects of market volatilities on BE Semiconductor and IMCD NV 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 BE Semiconductor with a short position of IMCD NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and IMCD NV.
Diversification Opportunities for BE Semiconductor and IMCD NV
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BESI and IMCD is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and IMCD NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMCD NV and BE Semiconductor 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 BE Semiconductor Industries are associated (or correlated) with IMCD NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMCD NV has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and IMCD NV go up and down completely randomly.
Pair Corralation between BE Semiconductor and IMCD NV
Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.72 times more return on investment than IMCD NV. However, BE Semiconductor is 1.72 times more volatile than IMCD NV. It trades about 0.12 of its potential returns per unit of risk. IMCD NV is currently generating about -0.08 per unit of risk. If you would invest 11,265 in BE Semiconductor Industries on September 26, 2024 and sell it today you would earn a total of 2,230 from holding BE Semiconductor Industries or generate 19.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BE Semiconductor Industries vs. IMCD NV
Performance |
Timeline |
BE Semiconductor Ind |
IMCD NV |
BE Semiconductor and IMCD NV Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BE Semiconductor and IMCD NV
The main advantage of trading using opposite BE Semiconductor and IMCD NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, IMCD NV 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 IMCD NV will offset losses from the drop in IMCD NV's long position.BE Semiconductor vs. ASM International NV | BE Semiconductor vs. ASR Nederland NV | BE Semiconductor vs. Koninklijke Ahold Delhaize |
IMCD NV vs. Fastned BV | IMCD NV vs. Basic Fit NV | IMCD NV vs. BE Semiconductor Industries | IMCD NV vs. ASM International NV |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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