Correlation Between BE Semiconductor and USS Co

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

Diversification Opportunities for BE Semiconductor and USS Co

-0.73

Correlation Coefficient

BE Semiconductor  USS Co

Pay attention - limited upside

The 3 months correlation between BSI and USS is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and USS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co 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 USS Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and USS Co go up and down completely randomly.

Pair Corralation between BE Semiconductor and USS Co

Assuming the 90 days trading horizon BE Semiconductor Industries is expected to under-perform the USS Co. In addition to that, BE Semiconductor is 2.96 times more volatile than USS Co. It trades about -0.06 of its total potential returns per unit of risk. USS Co is currently generating about 0.08 per unit of volatility. If you would invest  830.00  in USS Co on December 19, 2024 and sell it today you would earn a total of  50.00  from holding USS Co or generate 6.02% return on investment over 90 days.

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

BE Semiconductor Industries  vs.  USS Co

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.

USS Co

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in USS Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, USS Co may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BE Semiconductor and USS Co

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

The idea behind BE Semiconductor Industries and USS Co 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.