Correlation Between STMicroelectronics and Symphony Environmental
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Symphony Environmental 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 Symphony Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Symphony Environmental Technologies, you can compare the effects of market volatilities on STMicroelectronics and Symphony Environmental 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 Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Symphony Environmental.
Diversification Opportunities for STMicroelectronics and Symphony Environmental
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STMicroelectronics and Symphony is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Symphony Environmental go up and down completely randomly.
Pair Corralation between STMicroelectronics and Symphony Environmental
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Symphony Environmental. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 3.09 times less risky than Symphony Environmental. The stock trades about -0.1 of its potential returns per unit of risk. The Symphony Environmental Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 375.00 in Symphony Environmental Technologies on September 14, 2024 and sell it today you would lose (60.00) from holding Symphony Environmental Technologies or give up 16.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Symphony Environmental Technol
Performance |
| Timeline |
| STMicroelectronics |
| Symphony Environmental |
STMicroelectronics and Symphony Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Symphony Environmental
The main advantage of trading using opposite STMicroelectronics and Symphony Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Symphony Environmental 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 Symphony Environmental will offset losses from the drop in Symphony Environmental's long position.| STMicroelectronics vs. Bank of Georgia | STMicroelectronics vs. Diversified Energy | STMicroelectronics vs. Quantum Blockchain Technologies | STMicroelectronics vs. Blue Star Capital |
| Symphony Environmental vs. CVS Health Corp | Symphony Environmental vs. PureTech Health plc | Symphony Environmental vs. Planet Fitness Cl | Symphony Environmental vs. Lords Grp Trading |
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 CEOs Directory module to screen CEOs from public companies around the world.
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