Correlation Between STMICROELECTRONICS and ARMADA HOFFLER
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and ARMADA HOFFLER 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 ARMADA HOFFLER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and ARMADA HOFFLER PR, you can compare the effects of market volatilities on STMICROELECTRONICS and ARMADA HOFFLER 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 ARMADA HOFFLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and ARMADA HOFFLER.
Diversification Opportunities for STMICROELECTRONICS and ARMADA HOFFLER
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STMICROELECTRONICS and ARMADA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and ARMADA HOFFLER PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARMADA HOFFLER PR 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 ARMADA HOFFLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARMADA HOFFLER PR has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and ARMADA HOFFLER go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and ARMADA HOFFLER
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to under-perform the ARMADA HOFFLER. In addition to that, STMICROELECTRONICS is 1.85 times more volatile than ARMADA HOFFLER PR. It trades about -0.17 of its total potential returns per unit of risk. ARMADA HOFFLER PR is currently generating about -0.21 per unit of volatility. If you would invest 980.00 in ARMADA HOFFLER PR on November 2, 2024 and sell it today you would lose (65.00) from holding ARMADA HOFFLER PR or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMICROELECTRONICS vs. ARMADA HOFFLER PR
Performance |
| Timeline |
| STMICROELECTRONICS |
| ARMADA HOFFLER PR |
STMICROELECTRONICS and ARMADA HOFFLER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and ARMADA HOFFLER
The main advantage of trading using opposite STMICROELECTRONICS and ARMADA HOFFLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, ARMADA HOFFLER 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 ARMADA HOFFLER will offset losses from the drop in ARMADA HOFFLER's long position.| STMICROELECTRONICS vs. Platinum Investment Management | STMICROELECTRONICS vs. Virtus Investment Partners | STMICROELECTRONICS vs. Ares Management Corp | STMICROELECTRONICS vs. PennantPark Investment |
| ARMADA HOFFLER vs. ANGANG STEEL H | ARMADA HOFFLER vs. RELIANCE STEEL AL | ARMADA HOFFLER vs. PLAYMATES TOYS | ARMADA HOFFLER vs. ePlay Digital |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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