Correlation Between STMicroelectronics and Gol Intelligent
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Gol Intelligent 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 Gol Intelligent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Gol Intelligent Airlines, you can compare the effects of market volatilities on STMicroelectronics and Gol Intelligent 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 Gol Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Gol Intelligent.
Diversification Opportunities for STMicroelectronics and Gol Intelligent
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STMicroelectronics and Gol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Gol Intelligent Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gol Intelligent Airlines 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 Gol Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gol Intelligent Airlines has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Gol Intelligent go up and down completely randomly.
Pair Corralation between STMicroelectronics and Gol Intelligent
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the Gol Intelligent. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 3.26 times less risky than Gol Intelligent. The stock trades about -0.02 of its potential returns per unit of risk. The Gol Intelligent Airlines is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Gol Intelligent Airlines on October 11, 2024 and sell it today you would lose (228.00) from holding Gol Intelligent Airlines or give up 84.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
STMicroelectronics NV vs. Gol Intelligent Airlines
Performance |
| Timeline |
| STMicroelectronics |
| Gol Intelligent Airlines |
STMicroelectronics and Gol Intelligent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Gol Intelligent
The main advantage of trading using opposite STMicroelectronics and Gol Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Gol Intelligent 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 Gol Intelligent will offset losses from the drop in Gol Intelligent's long position.| STMicroelectronics vs. FEMALE HEALTH | STMicroelectronics vs. Fuji Media Holdings | STMicroelectronics vs. REMEDY ENTERTAINMENT OYJ | STMicroelectronics vs. Ubisoft Entertainment SA |
| Gol Intelligent vs. CHRYSALIS INVESTMENTS LTD | Gol Intelligent vs. Nucletron Electronic Aktiengesellschaft | Gol Intelligent vs. STMicroelectronics NV | Gol Intelligent vs. Richardson 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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