Correlation Between STMicroelectronics and Applied Materials,
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Applied Materials, 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 Applied Materials, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Applied Materials,, you can compare the effects of market volatilities on STMicroelectronics and Applied Materials, 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 Applied Materials,. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Applied Materials,.
Diversification Opportunities for STMicroelectronics and Applied Materials,
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between STMicroelectronics and Applied is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Applied Materials, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials, 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 are associated (or correlated) with Applied Materials,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials, has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Applied Materials, go up and down completely randomly.
Pair Corralation between STMicroelectronics and Applied Materials,
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Applied Materials,. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.05 times less risky than Applied Materials,. The stock trades about -0.03 of its potential returns per unit of risk. The Applied Materials, is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,758 in Applied Materials, on October 17, 2024 and sell it today you would earn a total of 4,735 from holding Applied Materials, or generate 82.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 76.99% |
| Values | Daily Returns |
STMicroelectronics NV vs. Applied Materials,
Performance |
| Timeline |
| STMicroelectronics |
| Applied Materials, |
STMicroelectronics and Applied Materials, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Applied Materials,
The main advantage of trading using opposite STMicroelectronics and Applied Materials, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Applied Materials, 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 Applied Materials, will offset losses from the drop in Applied Materials,'s long position.| STMicroelectronics vs. Zoom Video Communications | STMicroelectronics vs. Prudential Financial | STMicroelectronics vs. Take Two Interactive Software | STMicroelectronics vs. United Natural Foods, |
| Applied Materials, vs. STMicroelectronics NV | Applied Materials, vs. Zoom Video Communications | Applied Materials, vs. Charter Communications | Applied Materials, vs. Liberty Broadband |
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.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |