Correlation Between Anglesey Mining and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Anglesey Mining 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 Anglesey Mining and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglesey Mining and STMicroelectronics NV, you can compare the effects of market volatilities on Anglesey Mining 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 Anglesey Mining with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglesey Mining and STMicroelectronics.
Diversification Opportunities for Anglesey Mining and STMicroelectronics
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anglesey and STMicroelectronics is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Anglesey Mining and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and Anglesey Mining 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 Anglesey Mining 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 Anglesey Mining i.e., Anglesey Mining and STMicroelectronics go up and down completely randomly.
Pair Corralation between Anglesey Mining and STMicroelectronics
Assuming the 90 days trading horizon Anglesey Mining is expected to generate 1.98 times more return on investment than STMicroelectronics. However, Anglesey Mining is 1.98 times more volatile than STMicroelectronics NV. It trades about -0.02 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about -0.06 per unit of risk. If you would invest 153.00 in Anglesey Mining on September 12, 2024 and sell it today you would lose (60.00) from holding Anglesey Mining or give up 39.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Anglesey Mining vs. STMicroelectronics NV
Performance |
| Timeline |
| Anglesey Mining |
| STMicroelectronics |
Anglesey Mining and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglesey Mining and STMicroelectronics
The main advantage of trading using opposite Anglesey Mining and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglesey Mining 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.| Anglesey Mining vs. Givaudan SA | Anglesey Mining vs. Antofagasta PLC | Anglesey Mining vs. Ferrexpo PLC | Anglesey Mining vs. Atalaya Mining |
| STMicroelectronics vs. Gamma Communications PLC | STMicroelectronics vs. Panther Metals PLC | STMicroelectronics vs. Batm Advanced Communications | STMicroelectronics vs. Anglesey Mining |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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