Correlation Between Mobilezone Holding and STMICROELECTRONICS

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

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

Diversification Opportunities for Mobilezone Holding and STMICROELECTRONICS

0.0

Correlation Coefficient

Mobilezone Holding  STMICROELECTRONICS

Pay attention - limited upside

The 3 months correlation between Mobilezone and STMICROELECTRONICS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mobilezone Holding AG and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS and Mobilezone Holding 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 Mobilezone Holding AG 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 Mobilezone Holding i.e., Mobilezone Holding and STMICROELECTRONICS go up and down completely randomly.

Pair Corralation between Mobilezone Holding and STMICROELECTRONICS

If you would invest  2,413  in STMICROELECTRONICS on December 4, 2024 and sell it today you would lose (23.00) from holding STMICROELECTRONICS or give up 0.95% of portfolio value over 90 days.

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

Mobilezone Holding AG  vs.  STMICROELECTRONICS

Mobilezone Holding

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with Mobilezone Holding and STMICROELECTRONICS

The main advantage of trading using opposite Mobilezone Holding and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobilezone Holding 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 Mobilezone Holding AG 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.