Correlation Between STMICROELECTRONICS and Nanjing Panda
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and Nanjing Panda 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 Nanjing Panda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and Nanjing Panda Electronics, you can compare the effects of market volatilities on STMICROELECTRONICS and Nanjing Panda 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 Nanjing Panda. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and Nanjing Panda.
Diversification Opportunities for STMICROELECTRONICS and Nanjing Panda
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STMICROELECTRONICS and Nanjing is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and Nanjing Panda Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Panda Electronics 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 Nanjing Panda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Panda Electronics has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and Nanjing Panda go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and Nanjing Panda
If you would invest 33.00 in Nanjing Panda Electronics on October 16, 2024 and sell it today you would earn a total of 0.00 from holding Nanjing Panda Electronics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
STMICROELECTRONICS vs. Nanjing Panda Electronics
Performance |
| Timeline |
| STMICROELECTRONICS |
| Nanjing Panda Electronics |
STMICROELECTRONICS and Nanjing Panda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and Nanjing Panda
The main advantage of trading using opposite STMICROELECTRONICS and Nanjing Panda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, Nanjing Panda 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 Nanjing Panda will offset losses from the drop in Nanjing Panda's long position.| STMICROELECTRONICS vs. CDN IMPERIAL BANK | STMICROELECTRONICS vs. Sun Life Financial | STMICROELECTRONICS vs. FLOW TRADERS LTD | STMICROELECTRONICS vs. TRADEGATE |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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