Correlation Between Astera Labs, and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Astera Labs, 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 Astera Labs, and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astera Labs, Common and STMicroelectronics NV, you can compare the effects of market volatilities on Astera Labs, 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 Astera Labs, with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astera Labs, and STMicroelectronics.
Diversification Opportunities for Astera Labs, and STMicroelectronics
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Astera and STMicroelectronics is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Astera Labs, Common and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and Astera Labs, 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 Astera Labs, Common 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 Astera Labs, i.e., Astera Labs, and STMicroelectronics go up and down completely randomly.
Pair Corralation between Astera Labs, and STMicroelectronics
Given the investment horizon of 90 days Astera Labs, Common is expected to generate 1.84 times more return on investment than STMicroelectronics. However, Astera Labs, is 1.84 times more volatile than STMicroelectronics NV. It trades about 0.08 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about -0.04 per unit of risk. If you would invest 6,203 in Astera Labs, Common on August 31, 2024 and sell it today you would earn a total of 4,122 from holding Astera Labs, Common or generate 66.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 47.59% |
| Values | Daily Returns |
Astera Labs, Common vs. STMicroelectronics NV
Performance |
| Timeline |
| Astera Labs, Common |
| STMicroelectronics |
Astera Labs, and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astera Labs, and STMicroelectronics
The main advantage of trading using opposite Astera Labs, and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astera Labs, 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.| Astera Labs, vs. Chester Mining | Astera Labs, vs. Lion One Metals | Astera Labs, vs. Barrick Gold Corp | Astera Labs, vs. Playa Hotels Resorts |
| STMicroelectronics vs. Silicon Laboratories | STMicroelectronics vs. Power Integrations | STMicroelectronics vs. Diodes Incorporated | STMicroelectronics vs. MaxLinear |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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