Correlation Between STMicroelectronics and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Gaztransport Technigaz 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 Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Gaztransport Technigaz SA, you can compare the effects of market volatilities on STMicroelectronics and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Gaztransport Technigaz.
Diversification Opportunities for STMicroelectronics and Gaztransport Technigaz
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STMicroelectronics and Gaztransport is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between STMicroelectronics and Gaztransport Technigaz
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the Gaztransport Technigaz. In addition to that, STMicroelectronics is 1.29 times more volatile than Gaztransport Technigaz SA. It trades about -0.03 of its total potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.04 per unit of volatility. If you would invest 9,970 in Gaztransport Technigaz SA on September 3, 2024 and sell it today you would earn a total of 3,790 from holding Gaztransport Technigaz SA or generate 38.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| STMicroelectronics |
| Gaztransport Technigaz |
STMicroelectronics and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Gaztransport Technigaz
The main advantage of trading using opposite STMicroelectronics and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| STMicroelectronics vs. Align Technology | STMicroelectronics vs. Micron Technology | STMicroelectronics vs. Fukuyama Transporting Co | STMicroelectronics vs. FANDIFI TECHNOLOGY P |
| Gaztransport Technigaz vs. NISSAN CHEMICAL IND | Gaztransport Technigaz vs. Siamgas And Petrochemicals | Gaztransport Technigaz vs. STMicroelectronics NV | Gaztransport Technigaz vs. LPKF Laser 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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