Correlation Between Metals Exploration and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Metals Exploration 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 Metals Exploration and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and STMicroelectronics NV, you can compare the effects of market volatilities on Metals Exploration 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 Metals Exploration with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and STMicroelectronics.
Diversification Opportunities for Metals Exploration and STMicroelectronics
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Metals and STMicroelectronics is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and Metals Exploration 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 Metals Exploration Plc 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 Metals Exploration i.e., Metals Exploration and STMicroelectronics go up and down completely randomly.
Pair Corralation between Metals Exploration and STMicroelectronics
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 1.8 times more return on investment than STMicroelectronics. However, Metals Exploration is 1.8 times more volatile than STMicroelectronics NV. It trades about 0.09 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about -0.03 per unit of risk. If you would invest 153.00 in Metals Exploration Plc on October 11, 2024 and sell it today you would earn a total of 452.00 from holding Metals Exploration Plc or generate 295.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Metals Exploration Plc vs. STMicroelectronics NV
Performance |
| Timeline |
| Metals Exploration Plc |
| STMicroelectronics |
Metals Exploration and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and STMicroelectronics
The main advantage of trading using opposite Metals Exploration and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration 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.| Metals Exploration vs. BW Offshore | Metals Exploration vs. Vienna Insurance Group | Metals Exploration vs. International Consolidated Airlines | Metals Exploration vs. Datalogic |
| STMicroelectronics vs. Metals Exploration Plc | STMicroelectronics vs. Jacquet Metal Service | STMicroelectronics vs. Delta Air Lines | STMicroelectronics vs. Hochschild Mining plc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |