Correlation Between STMICROELECTRONICS and Socit Gnrale
Can any of the company-specific risk be diversified away by investing in both STMICROELECTRONICS and Socit Gnrale 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 Socit Gnrale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMICROELECTRONICS and Socit Gnrale Socit, you can compare the effects of market volatilities on STMICROELECTRONICS and Socit Gnrale 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 Socit Gnrale. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and Socit Gnrale.
Diversification Opportunities for STMICROELECTRONICS and Socit Gnrale
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STMICROELECTRONICS and Socit is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and Socit Gnrale go up and down completely randomly.
Pair Corralation between STMICROELECTRONICS and Socit Gnrale
Assuming the 90 days trading horizon STMICROELECTRONICS is expected to under-perform the Socit Gnrale. In addition to that, STMICROELECTRONICS is 1.16 times more volatile than Socit Gnrale Socit. It trades about -0.02 of its total potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.04 per unit of volatility. If you would invest 2,092 in Socit Gnrale Socit on September 14, 2024 and sell it today you would earn a total of 640.00 from holding Socit Gnrale Socit or generate 30.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
STMICROELECTRONICS vs. Socit Gnrale Socit
Performance |
| Timeline |
| STMICROELECTRONICS |
| Socit Gnrale Socit |
STMICROELECTRONICS and Socit Gnrale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMICROELECTRONICS and Socit Gnrale
The main advantage of trading using opposite STMICROELECTRONICS and Socit Gnrale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, Socit Gnrale 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 Socit Gnrale will offset losses from the drop in Socit Gnrale's long position.| STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc | STMICROELECTRONICS vs. Apple Inc |
| Socit Gnrale vs. Meiko Electronics Co | Socit Gnrale vs. Benchmark Electronics | Socit Gnrale vs. METHODE ELECTRONICS | Socit Gnrale vs. STMICROELECTRONICS |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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