Correlation Between STMicroelectronics and Bemobi Mobile
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Bemobi Mobile 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 Bemobi Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Bemobi Mobile Tech, you can compare the effects of market volatilities on STMicroelectronics and Bemobi Mobile 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 Bemobi Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Bemobi Mobile.
Diversification Opportunities for STMicroelectronics and Bemobi Mobile
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STMicroelectronics and Bemobi is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Bemobi Mobile Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bemobi Mobile Tech 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 Bemobi Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bemobi Mobile Tech has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Bemobi Mobile go up and down completely randomly.
Pair Corralation between STMicroelectronics and Bemobi Mobile
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Bemobi Mobile. But the stock apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.24 times less risky than Bemobi Mobile. The stock trades about -0.44 of its potential returns per unit of risk. The Bemobi Mobile Tech is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 1,522 in Bemobi Mobile Tech on August 27, 2024 and sell it today you would lose (91.00) from holding Bemobi Mobile Tech or give up 5.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Bemobi Mobile Tech
Performance |
| Timeline |
| STMicroelectronics |
| Bemobi Mobile Tech |
STMicroelectronics and Bemobi Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Bemobi Mobile
The main advantage of trading using opposite STMicroelectronics and Bemobi Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Bemobi Mobile 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 Bemobi Mobile will offset losses from the drop in Bemobi Mobile's long position.| STMicroelectronics vs. GP Investments | STMicroelectronics vs. Fidelity National Information | STMicroelectronics vs. Verizon Communications | STMicroelectronics vs. Marfrig Global Foods |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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