Correlation Between BE Semiconductor and Symphony Environmental

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

Diversification Opportunities for BE Semiconductor and Symphony Environmental

-0.79

Correlation Coefficient

BE Semiconductor  Symphony Environmental

Pay attention - limited upside

The 3 months correlation between 0XVE and Symphony is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Symphony Environmental go up and down completely randomly.

Pair Corralation between BE Semiconductor and Symphony Environmental

Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.27 times more return on investment than Symphony Environmental. However, BE Semiconductor is 1.27 times more volatile than Symphony Environmental Technologies. It trades about 0.13 of its potential returns per unit of risk. Symphony Environmental Technologies is currently generating about -0.14 per unit of risk. If you would invest  10,968  in BE Semiconductor Industries on October 8, 2024 and sell it today you would earn a total of  2,595  from holding BE Semiconductor Industries or generate 23.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BE Semiconductor Industries  vs.  Symphony Environmental Technol

BE Semiconductor Ind

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BE Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with BE Semiconductor and Symphony Environmental

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

The idea behind BE Semiconductor Industries and Symphony Environmental Technologies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.