Correlation Between STMicroelectronics and Lexibook Linguistic
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Lexibook Linguistic 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 Lexibook Linguistic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Lexibook Linguistic Electronic, you can compare the effects of market volatilities on STMicroelectronics and Lexibook Linguistic 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 Lexibook Linguistic. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Lexibook Linguistic.
Diversification Opportunities for STMicroelectronics and Lexibook Linguistic
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STMicroelectronics and Lexibook is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Lexibook Linguistic Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lexibook Linguistic 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 Lexibook Linguistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lexibook Linguistic has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Lexibook Linguistic go up and down completely randomly.
Pair Corralation between STMicroelectronics and Lexibook Linguistic
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Lexibook Linguistic. In addition to that, STMicroelectronics is 10.23 times more volatile than Lexibook Linguistic Electronic. It trades about -0.05 of its total potential returns per unit of risk. Lexibook Linguistic Electronic is currently generating about 0.0 per unit of volatility. If you would invest 399.00 in Lexibook Linguistic Electronic on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Lexibook Linguistic Electronic or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Lexibook Linguistic Electronic
Performance |
| Timeline |
| STMicroelectronics |
| Lexibook Linguistic |
STMicroelectronics and Lexibook Linguistic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Lexibook Linguistic
The main advantage of trading using opposite STMicroelectronics and Lexibook Linguistic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Lexibook Linguistic 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 Lexibook Linguistic will offset losses from the drop in Lexibook Linguistic's long position.| STMicroelectronics vs. Hotelim Socit Anonyme | STMicroelectronics vs. Sogeclair SA | STMicroelectronics vs. Axway Software | STMicroelectronics vs. Sidetrade |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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