Correlation Between Wisekey International and STMicroelectronics
Can any of the company-specific risk be diversified away by investing in both Wisekey International and STMicroelectronics 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 Wisekey International and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wisekey International Holding and STMicroelectronics NV ADR, you can compare the effects of market volatilities on Wisekey International and STMicroelectronics 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 Wisekey International with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and STMicroelectronics.
Diversification Opportunities for Wisekey International and STMicroelectronics
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Wisekey and STMicroelectronics is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and STMicroelectronics NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics NV ADR and Wisekey International 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 Wisekey International Holding are associated (or correlated) with STMicroelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMicroelectronics NV ADR has no effect on the direction of Wisekey International i.e., Wisekey International and STMicroelectronics go up and down completely randomly.
Pair Corralation between Wisekey International and STMicroelectronics
Given the investment horizon of 90 days Wisekey International Holding is expected to generate 3.32 times more return on investment than STMicroelectronics. However, Wisekey International is 3.32 times more volatile than STMicroelectronics NV ADR. It trades about 0.1 of its potential returns per unit of risk. STMicroelectronics NV ADR is currently generating about -0.1 per unit of risk. If you would invest 166.00 in Wisekey International Holding on September 14, 2024 and sell it today you would earn a total of 412.00 from holding Wisekey International Holding or generate 248.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wisekey International Holding vs. STMicroelectronics NV ADR
Performance |
| Timeline |
| Wisekey International |
| STMicroelectronics NV ADR |
Wisekey International and STMicroelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wisekey International and STMicroelectronics
The main advantage of trading using opposite Wisekey International and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International position performs unexpectedly, STMicroelectronics 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 STMicroelectronics will offset losses from the drop in STMicroelectronics' long position.| Wisekey International vs. SemiLEDS | Wisekey International vs. GSI Technology | Wisekey International vs. SEALSQ Corp | Wisekey International vs. WiSA Technologies |
| STMicroelectronics vs. NXP Semiconductors NV | STMicroelectronics vs. Analog Devices | STMicroelectronics vs. ON Semiconductor | STMicroelectronics vs. Lattice Semiconductor |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |