Correlation Between BE Semiconductor and Xinhua Winshare

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

Diversification Opportunities for BE Semiconductor and Xinhua Winshare

0.65

Correlation Coefficient

BE Semiconductor  Xinhua Winshare

Poor diversification

The 3 months correlation between BSI and Xinhua is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and Xinhua Winshare go up and down completely randomly.

Pair Corralation between BE Semiconductor and Xinhua Winshare

Assuming the 90 days trading horizon BE Semiconductor Industries is expected to under-perform the Xinhua Winshare. In addition to that, BE Semiconductor is 1.73 times more volatile than Xinhua Winshare Publishing. It trades about -0.06 of its total potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.09 per unit of volatility. If you would invest  139.00  in Xinhua Winshare Publishing on December 20, 2024 and sell it today you would lose (17.00) from holding Xinhua Winshare Publishing or give up 12.23% of portfolio value over 90 days.

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

BE Semiconductor Industries  vs.  Xinhua Winshare Publishing

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.

Xinhua Winshare Publ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xinhua Winshare Publishing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BE Semiconductor and Xinhua Winshare

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

The idea behind BE Semiconductor Industries and Xinhua Winshare Publishing 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.