Correlation Between STMicroelectronics and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and CENTURIA OFFICE 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 CENTURIA OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and CENTURIA OFFICE REIT, you can compare the effects of market volatilities on STMicroelectronics and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and CENTURIA OFFICE.
Diversification Opportunities for STMicroelectronics and CENTURIA OFFICE
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between STMicroelectronics and CENTURIA is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 NV are associated (or correlated) with CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between STMicroelectronics and CENTURIA OFFICE
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the CENTURIA OFFICE. In addition to that, STMicroelectronics is 1.39 times more volatile than CENTURIA OFFICE REIT. It trades about -0.03 of its total potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.0 per unit of volatility. If you would invest 73.00 in CENTURIA OFFICE REIT on August 25, 2024 and sell it today you would lose (2.00) from holding CENTURIA OFFICE REIT or give up 2.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| STMicroelectronics |
| CENTURIA OFFICE REIT |
STMicroelectronics and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and CENTURIA OFFICE
The main advantage of trading using opposite STMicroelectronics and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| STMicroelectronics vs. AOI Electronics Co | STMicroelectronics vs. AAC TECHNOLOGHLDGADR | STMicroelectronics vs. Electronic Arts | STMicroelectronics vs. FARO Technologies |
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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