Correlation Between STMicroelectronics and Xiabuxiabu Catering
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Xiabuxiabu Catering 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 Xiabuxiabu Catering 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 Xiabuxiabu Catering Management, you can compare the effects of market volatilities on STMicroelectronics and Xiabuxiabu Catering 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 Xiabuxiabu Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Xiabuxiabu Catering.
Diversification Opportunities for STMicroelectronics and Xiabuxiabu Catering
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between STMicroelectronics and Xiabuxiabu is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV ADR and Xiabuxiabu Catering Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiabuxiabu Catering 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 Xiabuxiabu Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiabuxiabu Catering has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Xiabuxiabu Catering go up and down completely randomly.
Pair Corralation between STMicroelectronics and Xiabuxiabu Catering
Considering the 90-day investment horizon STMicroelectronics NV ADR is expected to generate 0.3 times more return on investment than Xiabuxiabu Catering. However, STMicroelectronics NV ADR is 3.33 times less risky than Xiabuxiabu Catering. It trades about -0.14 of its potential returns per unit of risk. Xiabuxiabu Catering Management is currently generating about -0.13 per unit of risk. If you would invest 4,123 in STMicroelectronics NV ADR on October 7, 2024 and sell it today you would lose (1,682) from holding STMicroelectronics NV ADR or give up 40.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV ADR vs. Xiabuxiabu Catering Management
Performance |
| Timeline |
| STMicroelectronics NV ADR |
| Xiabuxiabu Catering |
STMicroelectronics and Xiabuxiabu Catering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Xiabuxiabu Catering
The main advantage of trading using opposite STMicroelectronics and Xiabuxiabu Catering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Xiabuxiabu Catering 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 Xiabuxiabu Catering will offset losses from the drop in Xiabuxiabu Catering's long position.| STMicroelectronics vs. NXP Semiconductors NV | STMicroelectronics vs. Analog Devices | STMicroelectronics vs. ON Semiconductor | STMicroelectronics vs. Lattice Semiconductor |
| Xiabuxiabu Catering vs. Summit Midstream | Xiabuxiabu Catering vs. Aris Water Solutions | Xiabuxiabu Catering vs. Weibo Corp | Xiabuxiabu Catering vs. Cheniere Energy Partners |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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