Correlation Between BE Semiconductor and Ebusco Holding

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

Diversification Opportunities for BE Semiconductor and Ebusco Holding

0.82

Correlation Coefficient

BE Semiconductor  Ebusco Holding

Very poor diversification

The 3 months correlation between BESI and Ebusco is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Ebusco Holding BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebusco Holding BV 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 Ebusco Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebusco Holding BV has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Ebusco Holding go up and down completely randomly.

Pair Corralation between BE Semiconductor and Ebusco Holding

Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 0.62 times more return on investment than Ebusco Holding. However, BE Semiconductor Industries is 1.61 times less risky than Ebusco Holding. It trades about -0.12 of its potential returns per unit of risk. Ebusco Holding BV is currently generating about -0.26 per unit of risk. If you would invest  13,350  in BE Semiconductor Industries on December 21, 2024 and sell it today you would lose (2,630) from holding BE Semiconductor Industries or give up 19.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

BE Semiconductor Industries  vs.  Ebusco Holding BV

BE Semiconductor Ind

Risk-Adjusted Performance

Very Weak

Over the last 90 days BE Semiconductor Industries 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ebusco Holding BV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ebusco Holding BV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BE Semiconductor and Ebusco Holding

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

The idea behind BE Semiconductor Industries and Ebusco Holding BV 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.