Correlation Between STMicroelectronics and Gaztransport
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Gaztransport 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 STMicroelectronics and Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Gaztransport et Technigaz, you can compare the effects of market volatilities on STMicroelectronics and Gaztransport 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 STMicroelectronics with a short position of Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Gaztransport.
Diversification Opportunities for STMicroelectronics and Gaztransport
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STMicroelectronics and Gaztransport is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz and STMicroelectronics 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 STMicroelectronics NV are associated (or correlated) with Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Gaztransport go up and down completely randomly.
Pair Corralation between STMicroelectronics and Gaztransport
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Gaztransport. In addition to that, STMicroelectronics is 1.27 times more volatile than Gaztransport et Technigaz. It trades about -0.02 of its total potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.05 per unit of volatility. If you would invest 9,576 in Gaztransport et Technigaz on September 12, 2024 and sell it today you would earn a total of 3,724 from holding Gaztransport et Technigaz or generate 38.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
STMicroelectronics NV vs. Gaztransport et Technigaz
Performance |
| Timeline |
| STMicroelectronics |
| Gaztransport et Technigaz |
STMicroelectronics and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Gaztransport
The main advantage of trading using opposite STMicroelectronics and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| STMicroelectronics vs. Gamma Communications PLC | STMicroelectronics vs. Panther Metals PLC | STMicroelectronics vs. Batm Advanced Communications | STMicroelectronics vs. Anglesey Mining |
| Gaztransport vs. MyHealthChecked Plc | Gaztransport vs. Hansa Investment | Gaztransport vs. Oakley Capital Investments | Gaztransport vs. HCA Healthcare |
Check out your portfolio center.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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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