Correlation Between STMICROELECTRONICS and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on STMICROELECTRONICS and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and MEDICAL FACILITIES.
Diversification Opportunities for STMICROELECTRONICS and MEDICAL FACILITIES
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STMICROELECTRONICS and MEDICAL is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and MEDICAL FACILITIES
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to generate 0.89 times more return on investment than MEDICAL FACILITIES. However, STMICROELECTRONICS is 1.12 times less risky than MEDICAL FACILITIES. It trades about 0.03 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about -0.01 per unit of risk. If you would invest 2,397 in STMICROELECTRONICS on October 20, 2024 and sell it today you would earn a total of 19.00 from holding STMICROELECTRONICS or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMICROELECTRONICS vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| STMICROELECTRONICS |
| MEDICAL FACILITIES NEW |
STMICROELECTRONICS and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and MEDICAL FACILITIES
The main advantage of trading using opposite STMICROELECTRONICS and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| STMICROELECTRONICS vs. Transport International Holdings | STMICROELECTRONICS vs. JLF INVESTMENT | STMICROELECTRONICS vs. Yuexiu Transport Infrastructure | STMICROELECTRONICS vs. Chuangs China Investments |
| MEDICAL FACILITIES vs. AIR PRODCHEMICALS | MEDICAL FACILITIES vs. KIMBALL ELECTRONICS | MEDICAL FACILITIES vs. STMICROELECTRONICS | MEDICAL FACILITIES vs. Globex Mining Enterprises |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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