Correlation Between STMicroelectronics and Saputo
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Saputo 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 Saputo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Saputo Inc, you can compare the effects of market volatilities on STMicroelectronics and Saputo 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 Saputo. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Saputo.
Diversification Opportunities for STMicroelectronics and Saputo
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STMicroelectronics and Saputo is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo Inc 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 Saputo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Saputo go up and down completely randomly.
Pair Corralation between STMicroelectronics and Saputo
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the Saputo. In addition to that, STMicroelectronics is 1.62 times more volatile than Saputo Inc. It trades about -0.06 of its total potential returns per unit of risk. Saputo Inc is currently generating about 0.01 per unit of volatility. If you would invest 1,796 in Saputo Inc on September 12, 2024 and sell it today you would lose (12.00) from holding Saputo Inc or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Saputo Inc
Performance |
| Timeline |
| STMicroelectronics |
| Saputo Inc |
STMicroelectronics and Saputo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Saputo
The main advantage of trading using opposite STMicroelectronics and Saputo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Saputo 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 Saputo will offset losses from the drop in Saputo's long position.| STMicroelectronics vs. Taiwan Semiconductor Manufacturing | STMicroelectronics vs. Broadcom | STMicroelectronics vs. Superior Plus Corp | STMicroelectronics vs. SIVERS SEMICONDUCTORS AB |
| Saputo vs. KIMBALL ELECTRONICS | Saputo vs. Seven West Media | Saputo vs. UET United Electronic | Saputo vs. JD SPORTS FASH |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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