Correlation Between Panther Metals and BE Semiconductor

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

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

Diversification Opportunities for Panther Metals and BE Semiconductor

-0.19

Correlation Coefficient

Panther Metals  BE Semiconductor

Good diversification

The 3 months correlation between Panther and 0XVE is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Panther Metals PLC 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 Panther Metals 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 Panther Metals PLC 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 Panther Metals i.e., Panther Metals and BE Semiconductor go up and down completely randomly.

Pair Corralation between Panther Metals and BE Semiconductor

Assuming the 90 days trading horizon Panther Metals PLC is expected to generate 23.96 times more return on investment than BE Semiconductor. However, Panther Metals is 23.96 times more volatile than BE Semiconductor Industries. It trades about 0.06 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.06 per unit of risk. If you would invest  8,250  in Panther Metals PLC on October 5, 2024 and sell it today you would earn a total of  250.00  from holding Panther Metals PLC or generate 3.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.12%
Values	Daily Returns

Panther Metals PLC  vs.  BE Semiconductor Industries

Panther Metals PLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panther Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

BE Semiconductor Ind

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BE Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Panther Metals and BE Semiconductor

The main advantage of trading using opposite Panther Metals and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panther Metals 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 Panther Metals PLC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.