Correlation Between Western Copper and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Western Copper 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 Western Copper and STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and STMICROELECTRONICS, you can compare the effects of market volatilities on Western Copper 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 Western Copper with a short position of STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and STMICROELECTRONICS.
Diversification Opportunities for Western Copper and STMICROELECTRONICS
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Western and STMICROELECTRONICS is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and Western Copper 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 Western Copper and 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 Western Copper i.e., Western Copper and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between Western Copper and STMICROELECTRONICS
Assuming the 90 days trading horizon Western Copper and is expected to generate 1.35 times more return on investment than STMICROELECTRONICS. However, Western Copper is 1.35 times more volatile than STMICROELECTRONICS. It trades about -0.02 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about -0.03 per unit of risk. If you would invest 169.00 in Western Copper and on October 14, 2024 and sell it today you would lose (66.00) from holding Western Copper and or give up 39.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. STMICROELECTRONICS
Performance |
| Timeline |
| Western Copper |
| STMICROELECTRONICS |
Western Copper and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and STMICROELECTRONICS
The main advantage of trading using opposite Western Copper and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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.| Western Copper vs. Xiwang Special Steel | Western Copper vs. United States Steel | Western Copper vs. RELIANCE STEEL AL | Western Copper vs. SALESFORCE INC CDR |
| STMICROELECTRONICS vs. MAGNUM MINING EXP | STMICROELECTRONICS vs. ARDAGH METAL PACDL 0001 | STMICROELECTRONICS vs. De Grey Mining | STMICROELECTRONICS vs. Western Copper and |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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