Correlation Between SCANDMEDICAL SOLDK-040 and STMicroelectronics

Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 and STMicroelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and STMicroelectronics NV, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK-040 with a short position of STMicroelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK-040 and STMicroelectronics.

Diversification Opportunities for SCANDMEDICAL SOLDK-040 and STMicroelectronics

-0.18

Correlation Coefficient

SCANDMEDICAL SOLDK-040  STMicroelectronics

Good diversification

The 3 months correlation between SCANDMEDICAL and STMicroelectronics is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040 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 SCANDMEDICAL SOLDK-040 i.e., SCANDMEDICAL SOLDK-040 and STMicroelectronics go up and down completely randomly.

Pair Corralation between SCANDMEDICAL SOLDK-040 and STMicroelectronics

Assuming the 90 days horizon SCANDMEDICAL SOLDK 040 is expected to generate 0.8 times more return on investment than STMicroelectronics. However, SCANDMEDICAL SOLDK 040 is 1.25 times less risky than STMicroelectronics. It trades about 0.0 of its potential returns per unit of risk. STMicroelectronics NV is currently generating about 0.0 per unit of risk. If you would invest  59.00  in SCANDMEDICAL SOLDK 040 on May 10, 2025 and sell it today you would lose (1.00) from holding SCANDMEDICAL SOLDK 040 or give up 1.69% of portfolio value over 90 days.

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

SCANDMEDICAL SOLDK 040  vs.  STMicroelectronics NV

SCANDMEDICAL SOLDK 040

Risk-Adjusted Performance

Weakest

Over the last 90 days SCANDMEDICAL SOLDK 040 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SCANDMEDICAL SOLDK-040 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

Weakest

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

Pair Trading with SCANDMEDICAL SOLDK-040 and STMicroelectronics

The main advantage of trading using opposite SCANDMEDICAL SOLDK-040 and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK-040 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.

The idea behind SCANDMEDICAL SOLDK 040 and STMicroelectronics NV 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..