Correlation Between Beeks Trading and BE Semiconductor

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

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

Diversification Opportunities for Beeks Trading and BE Semiconductor

-0.09

Correlation Coefficient

Beeks Trading  BE Semiconductor

Good diversification

The 3 months correlation between Beeks and 0XVE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading 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 Beeks Trading 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 Beeks Trading 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 Beeks Trading i.e., Beeks Trading and BE Semiconductor go up and down completely randomly.

Pair Corralation between Beeks Trading and BE Semiconductor

Assuming the 90 days trading horizon Beeks Trading is expected to generate 1.05 times less return on investment than BE Semiconductor. In addition to that, Beeks Trading is 1.03 times more volatile than BE Semiconductor Industries. It trades about 0.06 of its total potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.06 per unit of volatility. If you would invest  5,917  in BE Semiconductor Industries on September 3, 2024 and sell it today you would earn a total of  5,471  from holding BE Semiconductor Industries or generate 92.46% return on investment over 90 days.

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

Beeks Trading  vs.  BE Semiconductor Industries

Beeks Trading

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Beeks Trading are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Beeks Trading is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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. In spite of comparatively stable basic indicators, BE Semiconductor is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Beeks Trading and BE Semiconductor

The main advantage of trading using opposite Beeks Trading and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading 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 Beeks Trading 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.