Correlation Between STMICROELECTRONICS and ACCSYS TECHPLC
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and ACCSYS TECHPLC 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 STMICROELECTRONICS and ACCSYS TECHPLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and ACCSYS TECHPLC EO, you can compare the effects of market volatilities on STMICROELECTRONICS and ACCSYS TECHPLC 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 STMICROELECTRONICS with a short position of ACCSYS TECHPLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and ACCSYS TECHPLC.
Diversification Opportunities for STMICROELECTRONICS and ACCSYS TECHPLC
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STMICROELECTRONICS and ACCSYS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and ACCSYS TECHPLC EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCSYS TECHPLC EO and STMICROELECTRONICS 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 STMICROELECTRONICS are associated (or correlated) with ACCSYS TECHPLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCSYS TECHPLC EO has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and ACCSYS TECHPLC go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and ACCSYS TECHPLC
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to under-perform the ACCSYS TECHPLC. In addition to that, STMICROELECTRONICS is 1.08 times more volatile than ACCSYS TECHPLC EO. It trades about -0.07 of its total potential returns per unit of risk. ACCSYS TECHPLC EO is currently generating about -0.03 per unit of volatility. If you would invest 69.00 in ACCSYS TECHPLC EO on September 14, 2024 and sell it today you would lose (14.00) from holding ACCSYS TECHPLC EO or give up 20.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMICROELECTRONICS vs. ACCSYS TECHPLC EO
Performance |
| Timeline |
| STMICROELECTRONICS |
| ACCSYS TECHPLC EO |
STMICROELECTRONICS and ACCSYS TECHPLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and ACCSYS TECHPLC
The main advantage of trading using opposite STMICROELECTRONICS and ACCSYS TECHPLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, ACCSYS TECHPLC 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 ACCSYS TECHPLC will offset losses from the drop in ACCSYS TECHPLC's long position.| STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc |
| ACCSYS TECHPLC vs. Superior Plus Corp | ACCSYS TECHPLC vs. SIVERS SEMICONDUCTORS AB | ACCSYS TECHPLC vs. NorAm Drilling AS | ACCSYS TECHPLC vs. Norsk Hydro ASA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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