Correlation Between STMicroelectronics and Zinc Media
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Zinc 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 Zinc 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 Zinc Media Group, you can compare the effects of market volatilities on STMicroelectronics and Zinc 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 Zinc Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Zinc Media.
Diversification Opportunities for STMicroelectronics and Zinc Media
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between STMicroelectronics and Zinc is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Zinc Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinc 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 Zinc Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinc Media Group has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Zinc Media go up and down completely randomly.
Pair Corralation between STMicroelectronics and Zinc Media
Assuming the 90 days trading horizon STMicroelectronics is expected to generate 6.66 times less return on investment than Zinc Media. But when comparing it to its historical volatility, STMicroelectronics NV is 1.08 times less risky than Zinc Media. It trades about 0.04 of its potential returns per unit of risk. Zinc Media Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 5,150 in Zinc Media Group on October 30, 2024 and sell it today you would earn a total of 600.00 from holding Zinc Media Group or generate 11.65% 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. Zinc Media Group
Performance |
| Timeline |
| STMicroelectronics |
| Zinc Media Group |
STMicroelectronics and Zinc Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Zinc Media
The main advantage of trading using opposite STMicroelectronics and Zinc Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Zinc 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 Zinc Media will offset losses from the drop in Zinc Media's long position.| STMicroelectronics vs. Vietnam Enterprise Investments | STMicroelectronics vs. Monks Investment Trust | STMicroelectronics vs. Bisichi Mining PLC | STMicroelectronics vs. Beeks Trading |
| Zinc Media vs. Omega Healthcare Investors | Zinc Media vs. PureTech Health plc | Zinc Media vs. Empire Metals Limited | Zinc Media vs. HCA Healthcare |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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