Correlation Between STMicroelectronics and FEDEX
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By analyzing existing cross correlation between STMicroelectronics NV ADR and FEDEX P 405, you can compare the effects of market volatilities on STMicroelectronics and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and FEDEX.
Diversification Opportunities for STMicroelectronics and FEDEX
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STMicroelectronics and FEDEX is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV ADR and FEDEX P 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 405 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 405 has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and FEDEX go up and down completely randomly.
Pair Corralation between STMicroelectronics and FEDEX
Considering the 90-day investment horizon STMicroelectronics NV ADR is expected to under-perform the FEDEX. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV ADR is 20.29 times less risky than FEDEX. The stock trades about -0.01 of its potential returns per unit of risk. The FEDEX P 405 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,678 in FEDEX P 405 on September 14, 2024 and sell it today you would earn a total of 726.00 from holding FEDEX P 405 or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.33% |
| Values | Daily Returns |
STMicroelectronics NV ADR vs. FEDEX P 405
Performance |
| Timeline |
| STMicroelectronics NV ADR |
| FEDEX P 405 |
STMicroelectronics and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and FEDEX
The main advantage of trading using opposite STMicroelectronics and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX'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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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