Correlation Between STMicroelectronics and Saia
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Saia 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 Saia 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 Saia Inc, you can compare the effects of market volatilities on STMicroelectronics and Saia 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 Saia. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Saia.
Diversification Opportunities for STMicroelectronics and Saia
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STMicroelectronics and Saia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV ADR and Saia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saia 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 ADR are associated (or correlated) with Saia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saia Inc has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Saia go up and down completely randomly.
Pair Corralation between STMicroelectronics and Saia
Considering the 90-day investment horizon STMicroelectronics NV ADR is expected to under-perform the Saia. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV ADR is 1.19 times less risky than Saia. The stock trades about -0.09 of its potential returns per unit of risk. The Saia Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 48,614 in Saia Inc on November 2, 2024 and sell it today you would earn a total of 886.00 from holding Saia Inc or generate 1.82% 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. Saia Inc
Performance |
| Timeline |
| STMicroelectronics NV ADR |
| Saia Inc |
STMicroelectronics and Saia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Saia
The main advantage of trading using opposite STMicroelectronics and Saia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Saia 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 Saia will offset losses from the drop in Saia's long position.| STMicroelectronics vs. NXP Semiconductors NV | STMicroelectronics vs. Analog Devices | STMicroelectronics vs. ON Semiconductor | STMicroelectronics vs. Lattice Semiconductor |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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