Correlation Between STMicroelectronics and Shenguan Holdings
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Shenguan Holdings 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 Shenguan Holdings 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 Shenguan Holdings Group, you can compare the effects of market volatilities on STMicroelectronics and Shenguan Holdings 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 Shenguan Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Shenguan Holdings.
Diversification Opportunities for STMicroelectronics and Shenguan Holdings
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STMicroelectronics and Shenguan is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV ADR and Shenguan Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenguan Holdings 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 Shenguan Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenguan Holdings has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Shenguan Holdings go up and down completely randomly.
Pair Corralation between STMicroelectronics and Shenguan Holdings
Considering the 90-day investment horizon STMicroelectronics NV ADR is expected to generate 0.97 times more return on investment than Shenguan Holdings. However, STMicroelectronics NV ADR is 1.03 times less risky than Shenguan Holdings. It trades about -0.1 of its potential returns per unit of risk. Shenguan Holdings Group is currently generating about -0.1 per unit of risk. If you would invest 2,939 in STMicroelectronics NV ADR on November 2, 2024 and sell it today you would lose (687.00) from holding STMicroelectronics NV ADR or give up 23.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV ADR vs. Shenguan Holdings Group
Performance |
| Timeline |
| STMicroelectronics NV ADR |
| Shenguan Holdings |
STMicroelectronics and Shenguan Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Shenguan Holdings
The main advantage of trading using opposite STMicroelectronics and Shenguan Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Shenguan Holdings 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 Shenguan Holdings will offset losses from the drop in Shenguan Holdings' long position.| STMicroelectronics vs. NXP Semiconductors NV | STMicroelectronics vs. Analog Devices | STMicroelectronics vs. ON Semiconductor | STMicroelectronics vs. Lattice Semiconductor |
| Shenguan Holdings vs. Aldel Financial II | Shenguan Holdings vs. Valneva SE ADR | Shenguan Holdings vs. Western Acquisition Ventures | Shenguan Holdings vs. Griffon |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |