Correlation Between BE Semiconductor and SPEAR Investments

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

Diversification Opportunities for BE Semiconductor and SPEAR Investments

-0.82

Correlation Coefficient

BE Semiconductor  SPEAR Investments

Pay attention - limited upside

The 3 months correlation between BESI and SPEAR is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and SPEAR Investments I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPEAR Investments 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 SPEAR Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPEAR Investments has no effect on the direction of BE Semiconductor i.e., BE Semiconductor and SPEAR Investments go up and down completely randomly.

Pair Corralation between BE Semiconductor and SPEAR Investments

Assuming the 90 days trading horizon BE Semiconductor Industries is expected to generate 1.04 times more return on investment than SPEAR Investments. However, BE Semiconductor is 1.04 times more volatile than SPEAR Investments I. It trades about 0.22 of its potential returns per unit of risk. SPEAR Investments I is currently generating about -0.16 per unit of risk. If you would invest  9,106  in BE Semiconductor Industries on April 20, 2025 and sell it today you would earn a total of  3,689  from holding BE Semiconductor Industries or generate 40.51% return on investment over 90 days.

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

BE Semiconductor Industries  vs.  SPEAR Investments I

BE Semiconductor Ind

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 17 (%) 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.

SPEAR Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPEAR Investments I 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 August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BE Semiconductor and SPEAR Investments

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

The idea behind BE Semiconductor Industries and SPEAR Investments I 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.