Correlation Between BE Semiconductor and ASM International

Can any of the company-specific risk be diversified away by investing in both BE Semiconductor and ASM International 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 ASM International 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 ASM International NV, you can compare the effects of market volatilities on BE Semiconductor and ASM International 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 ASM International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BE Semiconductor and ASM International.

Diversification Opportunities for BE Semiconductor and ASM International

0.11

Correlation Coefficient

BE Semiconductor  ASM International

Average diversification

The 3 months correlation between BESVF and ASM is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and ASM International NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASM International 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 ASM International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASM International has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and ASM International go up and down completely randomly.

Pair Corralation between BE Semiconductor and ASM International

If you would invest  35,002  in ASM International NV on August 31, 2024 and sell it today you would earn a total of  0.00  from holding ASM International NV or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

BE Semiconductor Industries  vs.  ASM International NV

BE Semiconductor Ind

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BE Semiconductor Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BE Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ASM International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASM International NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, ASM International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BE Semiconductor and ASM International

The main advantage of trading using opposite BE Semiconductor and ASM International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor position performs unexpectedly, ASM International 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 ASM International will offset losses from the drop in ASM International's long position.

The idea behind BE Semiconductor Industries and ASM International NV 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.