Correlation Between STMicroelectronics and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Anglesey Mining 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 Anglesey Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Anglesey Mining, you can compare the effects of market volatilities on STMicroelectronics and Anglesey Mining 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 Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Anglesey Mining.
Diversification Opportunities for STMicroelectronics and Anglesey Mining
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STMicroelectronics and Anglesey is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining 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 Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Anglesey Mining go up and down completely randomly.
Pair Corralation between STMicroelectronics and Anglesey Mining
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Anglesey Mining. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.79 times less risky than Anglesey Mining. The stock trades about -0.16 of its potential returns per unit of risk. The Anglesey Mining is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 140.00 in Anglesey Mining on September 5, 2024 and sell it today you would lose (47.00) from holding Anglesey Mining or give up 33.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Anglesey Mining
Performance |
| Timeline |
| STMicroelectronics |
| Anglesey Mining |
STMicroelectronics and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Anglesey Mining
The main advantage of trading using opposite STMicroelectronics and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Anglesey Mining 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.| STMicroelectronics vs. State Street Corp | STMicroelectronics vs. DXC Technology Co | STMicroelectronics vs. Polar Capital Technology | STMicroelectronics vs. Reckitt Benckiser Group |
| Anglesey Mining vs. Antofagasta PLC | Anglesey Mining vs. Atalaya Mining | Anglesey Mining vs. Ferrexpo PLC | Anglesey Mining vs. Amaroq Minerals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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