Correlation Between STMicroelectronics and Beeks Trading
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Beeks Trading 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 Beeks Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Beeks Trading, you can compare the effects of market volatilities on STMicroelectronics and Beeks Trading 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 Beeks Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Beeks Trading.
Diversification Opportunities for STMicroelectronics and Beeks Trading
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between STMicroelectronics and Beeks is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Beeks Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beeks Trading 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 Beeks Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beeks Trading has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Beeks Trading go up and down completely randomly.
Pair Corralation between STMicroelectronics and Beeks Trading
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Beeks Trading. In addition to that, STMicroelectronics is 1.06 times more volatile than Beeks Trading. It trades about -0.04 of its total potential returns per unit of risk. Beeks Trading is currently generating about 0.01 per unit of volatility. If you would invest 27,000 in Beeks Trading on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Beeks Trading or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Beeks Trading
Performance |
| Timeline |
| STMicroelectronics |
| Beeks Trading |
STMicroelectronics and Beeks Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Beeks Trading
The main advantage of trading using opposite STMicroelectronics and Beeks Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Beeks Trading 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 Beeks Trading will offset losses from the drop in Beeks Trading's long position.| STMicroelectronics vs. Thyssenkrupp AG ON | STMicroelectronics vs. Cloudcoco Group PLC | STMicroelectronics vs. Trainline Plc | STMicroelectronics vs. Diversified Energy |
| Beeks Trading vs. GreenX Metals | Beeks Trading vs. Neometals | Beeks Trading vs. Silvercorp Metals | Beeks Trading vs. Wheaton Precious Metals |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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