Correlation Between Nucletron Electronic and STMICROELECTRONICS

Can any of the company-specific risk be diversified away by investing in both Nucletron Electronic 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 Nucletron Electronic and STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nucletron Electronic Aktiengesellschaft and STMICROELECTRONICS, you can compare the effects of market volatilities on Nucletron Electronic 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 Nucletron Electronic with a short position of STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nucletron Electronic and STMICROELECTRONICS.

Diversification Opportunities for Nucletron Electronic and STMICROELECTRONICS

0.0

Correlation Coefficient

Nucletron Electronic  STMICROELECTRONICS

Pay attention - limited upside

The 3 months correlation between Nucletron and STMICROELECTRONICS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nucletron Electronic Aktienges and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and Nucletron Electronic 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 Nucletron Electronic Aktiengesellschaft 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 has no effect on the direction of Nucletron Electronic i.e., Nucletron Electronic and STMICROELECTRONICS go up and down completely randomly.

Pair Corralation between Nucletron Electronic and STMICROELECTRONICS

Assuming the 90 days horizon Nucletron Electronic Aktiengesellschaft is expected to generate 0.13 times more return on investment than STMICROELECTRONICS. However, Nucletron Electronic Aktiengesellschaft is 7.55 times less risky than STMICROELECTRONICS. It trades about 0.06 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about -0.03 per unit of risk. If you would invest  695.00  in Nucletron Electronic Aktiengesellschaft on October 4, 2024 and sell it today you would earn a total of  65.00  from holding Nucletron Electronic Aktiengesellschaft or generate 9.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nucletron Electronic Aktienges  vs.  STMICROELECTRONICS

Nucletron Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nucletron Electronic Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Nucletron Electronic is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

STMICROELECTRONICS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STMICROELECTRONICS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, STMICROELECTRONICS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nucletron Electronic and STMICROELECTRONICS

The main advantage of trading using opposite Nucletron Electronic and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nucletron Electronic 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's long position.

The idea behind Nucletron Electronic Aktiengesellschaft and STMICROELECTRONICS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.