Correlation Between BE Semiconductor and EIDESVIK OFFSHORE

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

Diversification Opportunities for BE Semiconductor and EIDESVIK OFFSHORE

-0.31

Correlation Coefficient

BE Semiconductor  EIDESVIK OFFSHORE

Very good diversification

The 3 months correlation between BSI and EIDESVIK is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and EIDESVIK OFFSHORE go up and down completely randomly.

Pair Corralation between BE Semiconductor and EIDESVIK OFFSHORE

Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 0.91 times more return on investment than EIDESVIK OFFSHORE. However, BE Semiconductor Industries is 1.1 times less risky than EIDESVIK OFFSHORE. It trades about 0.07 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.04 per unit of risk. If you would invest  5,976  in BE Semiconductor Industries on October 11, 2024 and sell it today you would earn a total of  8,554  from holding BE Semiconductor Industries or generate 143.14% return on investment over 90 days.

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

BE Semiconductor Industries  vs.  EIDESVIK OFFSHORE NK

BE Semiconductor Ind

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, BE Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

EIDESVIK OFFSHORE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with BE Semiconductor and EIDESVIK OFFSHORE

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

The idea behind BE Semiconductor Industries and EIDESVIK OFFSHORE NK 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.