Correlation Between NIKKON HOLDINGS and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both NIKKON HOLDINGS and STMicroelectronics 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 NIKKON HOLDINGS and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIKKON HOLDINGS TD and STMicroelectronics NV, you can compare the effects of market volatilities on NIKKON HOLDINGS and STMicroelectronics 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 NIKKON HOLDINGS with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIKKON HOLDINGS and STMicroelectronics.
Diversification Opportunities for NIKKON HOLDINGS and STMicroelectronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NIKKON and STMicroelectronics is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NIKKON HOLDINGS TD and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and NIKKON HOLDINGS 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 NIKKON HOLDINGS TD are associated (or correlated) with STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics has no effect on the direction of NIKKON HOLDINGS i.e., NIKKON HOLDINGS and STMicroelectronics go up and down completely randomly.
Pair Corralation between NIKKON HOLDINGS and STMicroelectronics
If you would invest 2,420 in STMicroelectronics NV on October 25, 2024 and sell it today you would earn a total of 48.00 from holding STMicroelectronics NV or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.88% |
| Values | Daily Returns |
NIKKON HOLDINGS TD vs. STMicroelectronics NV
Performance |
| Timeline |
| NIKKON HOLDINGS TD |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| STMicroelectronics |
NIKKON HOLDINGS and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIKKON HOLDINGS and STMicroelectronics
The main advantage of trading using opposite NIKKON HOLDINGS and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIKKON HOLDINGS position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| NIKKON HOLDINGS vs. MTY Food Group | NIKKON HOLDINGS vs. Comba Telecom Systems | NIKKON HOLDINGS vs. Cairo Communication SpA | NIKKON HOLDINGS vs. Austevoll Seafood ASA |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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