Correlation Between STMicroelectronics and Fill Up
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Fill Up 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 Fill Up into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Fill Up Media, you can compare the effects of market volatilities on STMicroelectronics and Fill Up 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 Fill Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Fill Up.
Diversification Opportunities for STMicroelectronics and Fill Up
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STMicroelectronics and Fill is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Fill Up Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fill Up Media 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 Fill Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fill Up Media has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Fill Up go up and down completely randomly.
Pair Corralation between STMicroelectronics and Fill Up
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Fill Up. In addition to that, STMicroelectronics is 1.26 times more volatile than Fill Up Media. It trades about -0.2 of its total potential returns per unit of risk. Fill Up Media is currently generating about 0.15 per unit of volatility. If you would invest 555.00 in Fill Up Media on August 30, 2024 and sell it today you would earn a total of 35.00 from holding Fill Up Media or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Fill Up Media
Performance |
| Timeline |
| STMicroelectronics |
| Fill Up Media |
STMicroelectronics and Fill Up Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Fill Up
The main advantage of trading using opposite STMicroelectronics and Fill Up positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Fill Up 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 Fill Up will offset losses from the drop in Fill Up's long position.| STMicroelectronics vs. LVMH Mot Hennessy | STMicroelectronics vs. LOreal SA | STMicroelectronics vs. Hermes International SCA | STMicroelectronics vs. Manitou BF SA |
| Fill Up vs. Nacon Sa | Fill Up vs. Icape Holding | Fill Up vs. Grolleau SAS | Fill Up vs. Hydrogene De France |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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