Correlation Between STMicroelectronics and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Catalyst Media 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 Catalyst Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Catalyst Media Group, you can compare the effects of market volatilities on STMicroelectronics and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Catalyst Media.
Diversification Opportunities for STMicroelectronics and Catalyst Media
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between STMicroelectronics and Catalyst is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Catalyst Media go up and down completely randomly.
Pair Corralation between STMicroelectronics and Catalyst Media
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Catalyst Media. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.12 times less risky than Catalyst Media. The stock trades about -0.28 of its potential returns per unit of risk. The Catalyst Media Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,125 in Catalyst Media Group on November 6, 2024 and sell it today you would earn a total of 375.00 from holding Catalyst Media Group or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Catalyst Media Group
Performance |
| Timeline |
| STMicroelectronics |
| Catalyst Media Group |
STMicroelectronics and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Catalyst Media
The main advantage of trading using opposite STMicroelectronics and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| STMicroelectronics vs. Alliance Data Systems | STMicroelectronics vs. Extra Space Storage | STMicroelectronics vs. GlobalData PLC | STMicroelectronics vs. Odfjell Drilling |
| Catalyst Media vs. Alliance Data Systems | Catalyst Media vs. Software Circle plc | Catalyst Media vs. Public Storage | Catalyst Media vs. Xeros Technology Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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