Correlation Between STMICROELECTRONICS and ATOSS SOFTWARE
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and ATOSS SOFTWARE 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 ATOSS SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and ATOSS SOFTWARE, you can compare the effects of market volatilities on STMICROELECTRONICS and ATOSS SOFTWARE 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 ATOSS SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and ATOSS SOFTWARE.
Diversification Opportunities for STMICROELECTRONICS and ATOSS SOFTWARE
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STMICROELECTRONICS and ATOSS is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and ATOSS SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATOSS SOFTWARE 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 ATOSS SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATOSS SOFTWARE has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and ATOSS SOFTWARE go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and ATOSS SOFTWARE
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to under-perform the ATOSS SOFTWARE. In addition to that, STMICROELECTRONICS is 1.09 times more volatile than ATOSS SOFTWARE. It trades about -0.04 of its total potential returns per unit of risk. ATOSS SOFTWARE is currently generating about 0.05 per unit of volatility. If you would invest 8,032 in ATOSS SOFTWARE on October 27, 2024 and sell it today you would earn a total of 3,588 from holding ATOSS SOFTWARE or generate 44.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMICROELECTRONICS vs. ATOSS SOFTWARE
Performance |
| Timeline |
| STMICROELECTRONICS |
| ATOSS SOFTWARE |
STMICROELECTRONICS and ATOSS SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and ATOSS SOFTWARE
The main advantage of trading using opposite STMICROELECTRONICS and ATOSS SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, ATOSS SOFTWARE 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 ATOSS SOFTWARE will offset losses from the drop in ATOSS SOFTWARE's long position.| STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc |
| ATOSS SOFTWARE vs. Apple Inc | ATOSS SOFTWARE vs. Apple Inc | ATOSS SOFTWARE vs. Apple Inc | ATOSS SOFTWARE vs. Apple Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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