Correlation Between Nano Labs and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Nano 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 Nano Labs and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nano Labs and STMicroelectronics NV ADR, you can compare the effects of market volatilities on Nano 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 Nano Labs with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nano Labs and STMicroelectronics.
Diversification Opportunities for Nano Labs and STMicroelectronics
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nano and STMicroelectronics is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nano Labs and STMicroelectronics NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics NV ADR and Nano 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 Nano Labs 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 NV ADR has no effect on the direction of Nano Labs i.e., Nano Labs and STMicroelectronics go up and down completely randomly.
Pair Corralation between Nano Labs and STMicroelectronics
Allowing for the 90-day total investment horizon Nano Labs is expected to generate 14.77 times more return on investment than STMicroelectronics. However, Nano Labs is 14.77 times more volatile than STMicroelectronics NV ADR. It trades about 0.21 of its potential returns per unit of risk. STMicroelectronics NV ADR is currently generating about 0.19 per unit of risk. If you would invest 499.00 in Nano Labs on September 20, 2024 and sell it today you would earn a total of 428.00 from holding Nano Labs or generate 85.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nano Labs vs. STMicroelectronics NV ADR
Performance |
| Timeline |
| Nano Labs |
| STMicroelectronics NV ADR |
Nano Labs and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nano Labs and STMicroelectronics
The main advantage of trading using opposite Nano Labs and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano 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.| Nano Labs vs. SEALSQ Corp | Nano Labs vs. GSI Technology | Nano Labs vs. SemiLEDS | Nano Labs vs. ChipMOS Technologies |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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