Correlation Between Nanjing Panda and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Nanjing Panda 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 Nanjing Panda and STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanjing Panda Electronics and STMICROELECTRONICS, you can compare the effects of market volatilities on Nanjing Panda 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 Nanjing Panda with a short position of STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanjing Panda and STMICROELECTRONICS.
Diversification Opportunities for Nanjing Panda and STMICROELECTRONICS
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nanjing and STMICROELECTRONICS is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nanjing Panda Electronics and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and Nanjing Panda 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 Nanjing Panda Electronics 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 Nanjing Panda i.e., Nanjing Panda and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between Nanjing Panda and STMICROELECTRONICS
If you would invest 33.00 in Nanjing Panda Electronics on October 16, 2024 and sell it today you would earn a total of 0.00 from holding Nanjing Panda Electronics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
Nanjing Panda Electronics vs. STMICROELECTRONICS
Performance |
| Timeline |
| Nanjing Panda Electronics |
| STMICROELECTRONICS |
Nanjing Panda and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanjing Panda and STMICROELECTRONICS
The main advantage of trading using opposite Nanjing Panda and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanjing Panda 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.| Nanjing Panda vs. Marie Brizard Wine | Nanjing Panda vs. ITALIAN WINE BRANDS | Nanjing Panda vs. VIRGIN WINES UK | Nanjing Panda vs. CEOTRONICS |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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