Correlation Between STMicroelectronics and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Grand Canyon 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 Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Grand Canyon Education, you can compare the effects of market volatilities on STMicroelectronics and Grand Canyon 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 Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Grand Canyon.
Diversification Opportunities for STMicroelectronics and Grand Canyon
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STMicroelectronics and Grand is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education 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 Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Grand Canyon go up and down completely randomly.
Pair Corralation between STMicroelectronics and Grand Canyon
Assuming the 90 days horizon STMicroelectronics is expected to generate 3.27 times less return on investment than Grand Canyon. In addition to that, STMicroelectronics is 2.18 times more volatile than Grand Canyon Education. It trades about 0.02 of its total potential returns per unit of risk. Grand Canyon Education is currently generating about 0.14 per unit of volatility. If you would invest 15,500 in Grand Canyon Education on November 30, 2024 and sell it today you would earn a total of 1,400 from holding Grand Canyon Education or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
STMicroelectronics NV vs. Grand Canyon Education
Performance |
| Timeline |
| STMicroelectronics |
| Grand Canyon Education |
STMicroelectronics and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Grand Canyon
The main advantage of trading using opposite STMicroelectronics and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| STMicroelectronics vs. Verizon Communications | STMicroelectronics vs. Computershare Limited | STMicroelectronics vs. Fast Retailing Co | STMicroelectronics vs. GOME Retail Holdings |
| Grand Canyon vs. Grupo Carso SAB | Grand Canyon vs. Daido Steel Co | Grand Canyon vs. Geely Automobile Holdings | Grand Canyon vs. Commercial Vehicle Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |