Correlation Between VARIOUS EATERIES and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and STMICROELECTRONICS, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and STMICROELECTRONICS.
Diversification Opportunities for VARIOUS EATERIES and STMICROELECTRONICS
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between VARIOUS and STMICROELECTRONICS is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and STMICROELECTRONICS
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the STMICROELECTRONICS. In addition to that, VARIOUS EATERIES is 2.15 times more volatile than STMICROELECTRONICS. It trades about -0.14 of its total potential returns per unit of risk. STMICROELECTRONICS is currently generating about 0.19 per unit of volatility. If you would invest 2,380 in STMICROELECTRONICS on November 27, 2024 and sell it today you would earn a total of 284.00 from holding STMICROELECTRONICS or generate 11.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. STMICROELECTRONICS
Performance |
| Timeline |
| VARIOUS EATERIES |
| STMICROELECTRONICS |
VARIOUS EATERIES and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and STMICROELECTRONICS
The main advantage of trading using opposite VARIOUS EATERIES and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.| VARIOUS EATERIES vs. Salesforce | VARIOUS EATERIES vs. Cars Inc | VARIOUS EATERIES vs. Grupo Carso SAB | VARIOUS EATERIES vs. Commercial Vehicle Group |
| STMICROELECTRONICS vs. DETALION GAMES SA | STMICROELECTRONICS vs. Platinum Investment Management | STMICROELECTRONICS vs. AGNC Investment Corp | STMICROELECTRONICS vs. CONTAGIOUS GAMING 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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