Correlation Between STMicroelectronics and One Media
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and One 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 One 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 One Media iP, you can compare the effects of market volatilities on STMicroelectronics and One 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 One Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and One Media.
Diversification Opportunities for STMicroelectronics and One Media
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between STMicroelectronics and One is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and One Media iP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Media iP 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 One Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Media iP has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and One Media go up and down completely randomly.
Pair Corralation between STMicroelectronics and One Media
Assuming the 90 days trading horizon STMicroelectronics NV is expected to generate 4.06 times more return on investment than One Media. However, STMicroelectronics is 4.06 times more volatile than One Media iP. It trades about 0.12 of its potential returns per unit of risk. One Media iP is currently generating about 0.23 per unit of risk. If you would invest 2,356 in STMicroelectronics NV on October 24, 2024 and sell it today you would earn a total of 109.00 from holding STMicroelectronics NV or generate 4.63% 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. One Media iP
Performance |
| Timeline |
| STMicroelectronics |
| One Media iP |
STMicroelectronics and One Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and One Media
The main advantage of trading using opposite STMicroelectronics and One Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, One 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 One Media will offset losses from the drop in One Media's long position.| STMicroelectronics vs. Polar Capital Technology | STMicroelectronics vs. Spirent Communications plc | STMicroelectronics vs. mobilezone holding AG | STMicroelectronics vs. Micron Technology |
| One Media vs. United Utilities Group | One Media vs. STMicroelectronics NV | One Media vs. Compagnie Plastic Omnium | One Media vs. Aeorema Communications Plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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