Correlation Between ALTAIR RES and BE Semiconductor

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

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

Diversification Opportunities for ALTAIR RES and BE Semiconductor

0.0

Correlation Coefficient

ALTAIR RES  BE Semiconductor

Pay attention - limited upside

The 3 months correlation between ALTAIR and BSI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ALTAIR RES INC 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 ALTAIR RES 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 ALTAIR RES INC 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 ALTAIR RES i.e., ALTAIR RES and BE Semiconductor go up and down completely randomly.

Pair Corralation between ALTAIR RES and BE Semiconductor

If you would invest  10,760  in BE Semiconductor Industries on September 11, 2024 and sell it today you would earn a total of  1,755  from holding BE Semiconductor Industries or generate 16.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

ALTAIR RES INC  vs.  BE Semiconductor Industries

ALTAIR RES INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

BE Semiconductor Ind

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 7 (%) 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.

Pair Trading with ALTAIR RES and BE Semiconductor

The main advantage of trading using opposite ALTAIR RES and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALTAIR RES 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 ALTAIR RES INC 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.