Correlation Between STMicroelectronics and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and CSSC Offshore 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 CSSC Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and CSSC Offshore Marine, you can compare the effects of market volatilities on STMicroelectronics and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and CSSC Offshore.
Diversification Opportunities for STMicroelectronics and CSSC Offshore
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STMicroelectronics and CSSC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and CSSC Offshore go up and down completely randomly.
Pair Corralation between STMicroelectronics and CSSC Offshore
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the CSSC Offshore. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.35 times less risky than CSSC Offshore. The stock trades about -0.08 of its potential returns per unit of risk. The CSSC Offshore Marine is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 115.00 in CSSC Offshore Marine on October 29, 2024 and sell it today you would earn a total of 7.00 from holding CSSC Offshore Marine or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. CSSC Offshore Marine
Performance |
| Timeline |
| STMicroelectronics |
| CSSC Offshore Marine |
STMicroelectronics and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and CSSC Offshore
The main advantage of trading using opposite STMicroelectronics and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| STMicroelectronics vs. DATAGROUP SE | STMicroelectronics vs. Teradata Corp | STMicroelectronics vs. DATADOT TECHNOLOGY | STMicroelectronics vs. MAVEN WIRELESS SWEDEN |
| CSSC Offshore vs. PLAYSTUDIOS A DL 0001 | CSSC Offshore vs. Gaming and Leisure | CSSC Offshore vs. Hua Hong Semiconductor | CSSC Offshore vs. Playtech plc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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