Correlation Between STMicroelectronics and Amaroq Minerals
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Amaroq Minerals 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 Amaroq Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Amaroq Minerals, you can compare the effects of market volatilities on STMicroelectronics and Amaroq Minerals 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 Amaroq Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Amaroq Minerals.
Diversification Opportunities for STMicroelectronics and Amaroq Minerals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STMicroelectronics and Amaroq is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Amaroq Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaroq Minerals 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 Amaroq Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaroq Minerals has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Amaroq Minerals go up and down completely randomly.
Pair Corralation between STMicroelectronics and Amaroq Minerals
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Amaroq Minerals. In addition to that, STMicroelectronics is 1.13 times more volatile than Amaroq Minerals. It trades about -0.03 of its total potential returns per unit of risk. Amaroq Minerals is currently generating about 0.1 per unit of volatility. If you would invest 4,200 in Amaroq Minerals on August 29, 2024 and sell it today you would earn a total of 6,015 from holding Amaroq Minerals or generate 143.21% 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. Amaroq Minerals
Performance |
| Timeline |
| STMicroelectronics |
| Amaroq Minerals |
STMicroelectronics and Amaroq Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Amaroq Minerals
The main advantage of trading using opposite STMicroelectronics and Amaroq Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Amaroq Minerals 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 Amaroq Minerals will offset losses from the drop in Amaroq Minerals' long position.| STMicroelectronics vs. Neometals | STMicroelectronics vs. Coor Service Management | STMicroelectronics vs. Fidelity Sustainable USD | STMicroelectronics vs. Sancus Lending Group |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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