Correlation Between STMicroelectronics and International Business
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and International Business 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 International Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and International Business Machines, you can compare the effects of market volatilities on STMicroelectronics and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and International Business.
Diversification Opportunities for STMicroelectronics and International Business
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STMicroelectronics and International is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and International Business go up and down completely randomly.
Pair Corralation between STMicroelectronics and International Business
If you would invest 11,895 in International Business Machines on August 28, 2024 and sell it today you would earn a total of 0.00 from holding International Business Machines or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 67.44% |
| Values | Daily Returns |
STMicroelectronics NV vs. International Business Machine
Performance |
| Timeline |
| STMicroelectronics |
| International Business |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
STMicroelectronics and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and International Business
The main advantage of trading using opposite STMicroelectronics and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| STMicroelectronics vs. Neometals | STMicroelectronics vs. Coor Service Management | STMicroelectronics vs. Fidelity Sustainable USD | STMicroelectronics vs. Sancus Lending Group |
| International Business vs. Tatton Asset Management | International Business vs. Ironveld Plc | International Business vs. TR Property Investment | International Business vs. New Residential Investment |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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