Correlation Between STMICROELECTRONICS and VIAPLAY GROUP
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and VIAPLAY GROUP 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 VIAPLAY GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and VIAPLAY GROUP AB, you can compare the effects of market volatilities on STMICROELECTRONICS and VIAPLAY GROUP 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 VIAPLAY GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and VIAPLAY GROUP.
Diversification Opportunities for STMICROELECTRONICS and VIAPLAY GROUP
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STMICROELECTRONICS and VIAPLAY is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and VIAPLAY GROUP AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIAPLAY GROUP AB 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 VIAPLAY GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIAPLAY GROUP AB has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and VIAPLAY GROUP go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and VIAPLAY GROUP
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to generate 0.7 times more return on investment than VIAPLAY GROUP. However, STMICROELECTRONICS is 1.42 times less risky than VIAPLAY GROUP. It trades about 0.06 of its potential returns per unit of risk. VIAPLAY GROUP AB is currently generating about -0.11 per unit of risk. If you would invest 2,415 in STMICROELECTRONICS on September 5, 2024 and sell it today you would earn a total of 57.00 from holding STMICROELECTRONICS or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
STMICROELECTRONICS vs. VIAPLAY GROUP AB
Performance |
| Timeline |
| STMICROELECTRONICS |
| VIAPLAY GROUP AB |
STMICROELECTRONICS and VIAPLAY GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and VIAPLAY GROUP
The main advantage of trading using opposite STMICROELECTRONICS and VIAPLAY GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, VIAPLAY GROUP 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 VIAPLAY GROUP will offset losses from the drop in VIAPLAY GROUP's long position.| STMICROELECTRONICS vs. TOTAL GABON | STMICROELECTRONICS vs. Walgreens Boots Alliance | STMICROELECTRONICS vs. Peak Resources Limited |
| VIAPLAY GROUP vs. STMICROELECTRONICS | VIAPLAY GROUP vs. COMPUTERSHARE | VIAPLAY GROUP vs. UET United Electronic | VIAPLAY GROUP vs. Richardson Electronics |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |