Correlation Between STMICROELECTRONICS and SINCLAIR

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

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

Diversification Opportunities for STMICROELECTRONICS and SINCLAIR

0.0

Correlation Coefficient

STMICROELECTRONICS  SINCLAIR

Pay attention - limited upside

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

Pair Corralation between STMICROELECTRONICS and SINCLAIR

If you would invest (100.00) in SINCLAIR IS PHARMA on October 25, 2024 and sell it today you would earn a total of  100.00  from holding SINCLAIR IS PHARMA or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

STMICROELECTRONICS  vs.  SINCLAIR IS PHARMA

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.

SINCLAIR IS PHARMA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SINCLAIR IS PHARMA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SINCLAIR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with STMICROELECTRONICS and SINCLAIR

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

The idea behind STMICROELECTRONICS and SINCLAIR IS PHARMA 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.