Correlation Between STMicroelectronics and Eurobank Ergasias
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Eurobank Ergasias 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 Eurobank Ergasias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV ADR and Eurobank Ergasias Services, you can compare the effects of market volatilities on STMicroelectronics and Eurobank Ergasias 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 Eurobank Ergasias. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Eurobank Ergasias.
Diversification Opportunities for STMicroelectronics and Eurobank Ergasias
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STMicroelectronics and Eurobank is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV ADR and Eurobank Ergasias Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eurobank Ergasias 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 ADR are associated (or correlated) with Eurobank Ergasias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eurobank Ergasias has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Eurobank Ergasias go up and down completely randomly.
Pair Corralation between STMicroelectronics and Eurobank Ergasias
Considering the 90-day investment horizon STMicroelectronics NV ADR is expected to under-perform the Eurobank Ergasias. In addition to that, STMicroelectronics is 1.19 times more volatile than Eurobank Ergasias Services. It trades about -0.06 of its total potential returns per unit of risk. Eurobank Ergasias Services is currently generating about 0.35 per unit of volatility. If you would invest 209.00 in Eurobank Ergasias Services on October 12, 2024 and sell it today you would earn a total of 31.00 from holding Eurobank Ergasias Services or generate 14.83% 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 ADR vs. Eurobank Ergasias Services
Performance |
| Timeline |
| STMicroelectronics NV ADR |
| Eurobank Ergasias |
STMicroelectronics and Eurobank Ergasias Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Eurobank Ergasias
The main advantage of trading using opposite STMicroelectronics and Eurobank Ergasias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Eurobank Ergasias 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 Eurobank Ergasias will offset losses from the drop in Eurobank Ergasias' long position.| STMicroelectronics vs. NXP Semiconductors NV | STMicroelectronics vs. Analog Devices | STMicroelectronics vs. ON Semiconductor | STMicroelectronics vs. Lattice Semiconductor |
| Eurobank Ergasias vs. IPG Photonics | Eurobank Ergasias vs. Globalfoundries | Eurobank Ergasias vs. STMicroelectronics NV ADR | Eurobank Ergasias vs. Omni Health |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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