Correlation Between KENEDIX OFFICE and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE 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 KENEDIX OFFICE and STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and STMICROELECTRONICS, you can compare the effects of market volatilities on KENEDIX OFFICE 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 KENEDIX OFFICE with a short position of STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and STMICROELECTRONICS.
Diversification Opportunities for KENEDIX OFFICE and STMICROELECTRONICS
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KENEDIX and STMICROELECTRONICS is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 KENEDIX OFFICE i.e., KENEDIX OFFICE and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and STMICROELECTRONICS
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 1.06 times more return on investment than STMICROELECTRONICS. However, KENEDIX OFFICE is 1.06 times more volatile than STMICROELECTRONICS. It trades about 0.06 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about -0.03 per unit of risk. If you would invest 89,000 in KENEDIX OFFICE INV on October 10, 2024 and sell it today you would earn a total of 1,500 from holding KENEDIX OFFICE INV or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. STMICROELECTRONICS
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| STMICROELECTRONICS |
KENEDIX OFFICE and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and STMICROELECTRONICS
The main advantage of trading using opposite KENEDIX OFFICE and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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.| KENEDIX OFFICE vs. PULSION Medical Systems | KENEDIX OFFICE vs. Merit Medical Systems | KENEDIX OFFICE vs. BOSTON BEER A | KENEDIX OFFICE vs. Genertec Universal Medical |
| STMICROELECTRONICS vs. BOSTON BEER A | STMICROELECTRONICS vs. Hitachi Construction Machinery | STMICROELECTRONICS vs. United Breweries Co | STMICROELECTRONICS vs. National Beverage Corp |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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