Correlation Between GreenX Metals and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and STMicroelectronics NV, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and STMicroelectronics.
Diversification Opportunities for GreenX Metals and STMicroelectronics
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between GreenX and STMicroelectronics is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and STMicroelectronics go up and down completely randomly.
Pair Corralation between GreenX Metals and STMicroelectronics
Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the STMicroelectronics. In addition to that, GreenX Metals is 1.16 times more volatile than STMicroelectronics NV. It trades about -0.27 of its total potential returns per unit of risk. STMicroelectronics NV is currently generating about 0.03 per unit of volatility. If you would invest 2,425 in STMicroelectronics NV on September 4, 2024 and sell it today you would earn a total of 28.00 from holding STMicroelectronics NV or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. STMicroelectronics NV
Performance |
| Timeline |
| GreenX Metals |
| STMicroelectronics |
GreenX Metals and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and STMicroelectronics
The main advantage of trading using opposite GreenX Metals and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.| GreenX Metals vs. Lindsell Train Investment | GreenX Metals vs. Fresenius Medical Care | GreenX Metals vs. Various Eateries PLC | GreenX Metals vs. Cizzle Biotechnology Holdings |
| STMicroelectronics vs. Sovereign Metals | STMicroelectronics vs. GreenX Metals | STMicroelectronics vs. Fulcrum Metals PLC | STMicroelectronics vs. Zurich Insurance Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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