Correlation Between Oceanpal and STMicroelectronics

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

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

Diversification Opportunities for Oceanpal and STMicroelectronics

0.55

Correlation Coefficient

Oceanpal  STMicroelectronics

Very weak diversification

The 3 months correlation between Oceanpal and STMicroelectronics is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Oceanpal and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and Oceanpal 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 Oceanpal 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 Oceanpal i.e., Oceanpal and STMicroelectronics go up and down completely randomly.

Pair Corralation between Oceanpal and STMicroelectronics

Allowing for the 90-day total investment horizon Oceanpal is expected to under-perform the STMicroelectronics. In addition to that, Oceanpal is 6.72 times more volatile than STMicroelectronics NV. It trades about -0.04 of its total potential returns per unit of risk. STMicroelectronics NV is currently generating about 0.06 per unit of volatility. If you would invest  2,392  in STMicroelectronics NV on May 17, 2025 and sell it today you would earn a total of  208.00  from holding STMicroelectronics NV or generate 8.7% return on investment over 90 days.

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

Oceanpal  vs.  STMicroelectronics NV

Oceanpal

Risk-Adjusted Performance

Weakest

Over the last 90 days Oceanpal has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

STMicroelectronics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in STMicroelectronics NV are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, STMicroelectronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oceanpal and STMicroelectronics

The main advantage of trading using opposite Oceanpal and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceanpal 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 Oceanpal 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.