Correlation Between STMICROELECTRONICS and SUMMARECON AGUNG
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and SUMMARECON AGUNG 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 SUMMARECON AGUNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and SUMMARECON AGUNG, you can compare the effects of market volatilities on STMICROELECTRONICS and SUMMARECON AGUNG 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 SUMMARECON AGUNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and SUMMARECON AGUNG.
Diversification Opportunities for STMICROELECTRONICS and SUMMARECON AGUNG
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STMICROELECTRONICS and SUMMARECON is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and SUMMARECON AGUNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMMARECON AGUNG 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 SUMMARECON AGUNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMMARECON AGUNG has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and SUMMARECON AGUNG go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and SUMMARECON AGUNG
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to generate 0.32 times more return on investment than SUMMARECON AGUNG. However, STMICROELECTRONICS is 3.12 times less risky than SUMMARECON AGUNG. It trades about 0.03 of its potential returns per unit of risk. SUMMARECON AGUNG is currently generating about -0.06 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMICROELECTRONICS vs. SUMMARECON AGUNG
Performance |
| Timeline |
| STMICROELECTRONICS |
| SUMMARECON AGUNG |
STMICROELECTRONICS and SUMMARECON AGUNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and SUMMARECON AGUNG
The main advantage of trading using opposite STMICROELECTRONICS and SUMMARECON AGUNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, SUMMARECON AGUNG 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 SUMMARECON AGUNG will offset losses from the drop in SUMMARECON AGUNG's long position.| STMICROELECTRONICS vs. Transport International Holdings | STMICROELECTRONICS vs. JLF INVESTMENT | STMICROELECTRONICS vs. Yuexiu Transport Infrastructure | STMICROELECTRONICS vs. Chuangs China Investments |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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