Correlation Between FIRST SAVINGS and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS 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 FIRST SAVINGS and STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SAVINGS FINL and STMICROELECTRONICS, you can compare the effects of market volatilities on FIRST SAVINGS 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 FIRST SAVINGS with a short position of STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and STMICROELECTRONICS.
Diversification Opportunities for FIRST SAVINGS and STMICROELECTRONICS
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FIRST and STMICROELECTRONICS is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and FIRST SAVINGS 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 FIRST SAVINGS FINL 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 FIRST SAVINGS i.e., FIRST SAVINGS and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and STMICROELECTRONICS
Assuming the 90 days horizon FIRST SAVINGS FINL is expected to generate 0.97 times more return on investment than STMICROELECTRONICS. However, FIRST SAVINGS FINL is 1.03 times less risky than STMICROELECTRONICS. It trades about 0.04 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about -0.03 per unit of risk. If you would invest 1,724 in FIRST SAVINGS FINL on October 11, 2024 and sell it today you would earn a total of 616.00 from holding FIRST SAVINGS FINL or generate 35.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
FIRST SAVINGS FINL vs. STMICROELECTRONICS
Performance |
| Timeline |
| FIRST SAVINGS FINL |
| STMICROELECTRONICS |
FIRST SAVINGS and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SAVINGS and STMICROELECTRONICS
The main advantage of trading using opposite FIRST SAVINGS and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS 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.| FIRST SAVINGS vs. TRAINLINE PLC LS | FIRST SAVINGS vs. TITANIUM TRANSPORTGROUP | FIRST SAVINGS vs. Cleanaway Waste Management | FIRST SAVINGS vs. TYSON FOODS A |
| STMICROELECTRONICS vs. Wyndham Hotels Resorts | STMICROELECTRONICS vs. Choice Hotels International | STMICROELECTRONICS vs. Summit Hotel Properties | STMICROELECTRONICS vs. Webster Financial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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