Correlation Between STMICROELECTRONICS and Tower One

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

By analyzing existing cross correlation between STMICROELECTRONICS and Tower One Wireless, you can compare the effects of market volatilities on STMICROELECTRONICS and Tower One 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 Tower One. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMICROELECTRONICS and Tower One.

Diversification Opportunities for STMICROELECTRONICS and Tower One

0.0

Correlation Coefficient

STMICROELECTRONICS  Tower One

Pay attention - limited upside

The 3 months correlation between STMICROELECTRONICS and Tower is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STMICROELECTRONICS and Tower One Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower One Wireless 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 are associated (or correlated) with Tower One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower One Wireless has no effect on the direction of STMICROELECTRONICS i.e., STMICROELECTRONICS and Tower One go up and down completely randomly.

Pair Corralation between STMICROELECTRONICS and Tower One

If you would invest  2,123  in STMICROELECTRONICS on December 4, 2024 and sell it today you would earn a total of  267.00  from holding STMICROELECTRONICS or generate 12.58% return on investment over 90 days.

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

STMICROELECTRONICS  vs.  Tower One Wireless

STMICROELECTRONICS

Risk-Adjusted Performance

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.

Tower One Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tower One Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Tower One is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with STMICROELECTRONICS and Tower One

The main advantage of trading using opposite STMICROELECTRONICS and Tower One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMICROELECTRONICS position performs unexpectedly, Tower One 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 Tower One will offset losses from the drop in Tower One's long position.

The idea behind STMICROELECTRONICS and Tower One Wireless 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.