Correlation Between Chrysalis Investments and BE Semiconductor

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

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

Diversification Opportunities for Chrysalis Investments and BE Semiconductor

0.32

Correlation Coefficient

Chrysalis Investments  BE Semiconductor

Weak diversification

The 3 months correlation between Chrysalis and 0XVE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments i.e., Chrysalis Investments and BE Semiconductor go up and down completely randomly.

Pair Corralation between Chrysalis Investments and BE Semiconductor

Assuming the 90 days trading horizon Chrysalis Investments is expected to generate 0.6 times more return on investment than BE Semiconductor. However, Chrysalis Investments is 1.66 times less risky than BE Semiconductor. It trades about -0.09 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about -0.13 per unit of risk. If you would invest  10,540  in Chrysalis Investments on December 23, 2024 and sell it today you would lose (1,010) from holding Chrysalis Investments or give up 9.58% of portfolio value over 90 days.

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

Chrysalis Investments  vs.  BE Semiconductor Industries

Chrysalis Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chrysalis Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

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 unsteady 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 Chrysalis Investments and BE Semiconductor

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

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.