Correlation Between ACCSYS TECHPLC and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both ACCSYS TECHPLC 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 ACCSYS TECHPLC and STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACCSYS TECHPLC EO and STMICROELECTRONICS, you can compare the effects of market volatilities on ACCSYS TECHPLC 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 ACCSYS TECHPLC with a short position of STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCSYS TECHPLC and STMICROELECTRONICS.
Diversification Opportunities for ACCSYS TECHPLC and STMICROELECTRONICS
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ACCSYS and STMICROELECTRONICS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ACCSYS TECHPLC EO and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and ACCSYS TECHPLC 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 ACCSYS TECHPLC EO 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 ACCSYS TECHPLC i.e., ACCSYS TECHPLC and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between ACCSYS TECHPLC and STMICROELECTRONICS
Assuming the 90 days horizon ACCSYS TECHPLC is expected to generate 3.5 times less return on investment than STMICROELECTRONICS. In addition to that, ACCSYS TECHPLC is 1.44 times more volatile than STMICROELECTRONICS. It trades about 0.01 of its total potential returns per unit of risk. STMICROELECTRONICS is currently generating about 0.06 per unit of volatility. If you would invest 2,448 in STMICROELECTRONICS on September 14, 2024 and sell it today you would earn a total of 54.00 from holding STMICROELECTRONICS or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACCSYS TECHPLC EO vs. STMICROELECTRONICS
Performance |
| Timeline |
| ACCSYS TECHPLC EO |
| STMICROELECTRONICS |
ACCSYS TECHPLC and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACCSYS TECHPLC and STMICROELECTRONICS
The main advantage of trading using opposite ACCSYS TECHPLC and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACCSYS TECHPLC 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's long position.| ACCSYS TECHPLC vs. Superior Plus Corp | ACCSYS TECHPLC vs. SIVERS SEMICONDUCTORS AB | ACCSYS TECHPLC vs. NorAm Drilling AS | ACCSYS TECHPLC vs. Norsk Hydro ASA |
| STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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