Correlation Between STMicroelectronics and Eshallgo

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

By analyzing existing cross correlation between STMicroelectronics NV ADR and Eshallgo Class A, you can compare the effects of market volatilities on STMicroelectronics and Eshallgo 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 Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Eshallgo.

Diversification Opportunities for STMicroelectronics and Eshallgo

-0.82

Correlation Coefficient

STMicroelectronics  Eshallgo

Pay attention - limited upside

The 3 months correlation between STMicroelectronics and Eshallgo is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV ADR and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 NV ADR are associated (or correlated) with Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Eshallgo go up and down completely randomly.

Pair Corralation between STMicroelectronics and Eshallgo

Considering the 90-day investment horizon STMicroelectronics NV ADR is expected to generate 0.52 times more return on investment than Eshallgo. However, STMicroelectronics NV ADR is 1.94 times less risky than Eshallgo. It trades about 0.21 of its potential returns per unit of risk. Eshallgo Class A is currently generating about -0.08 per unit of risk. If you would invest  2,321  in STMicroelectronics NV ADR on April 25, 2025 and sell it today you would earn a total of  856.00  from holding STMicroelectronics NV ADR or generate 36.88% return on investment over 90 days.

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

STMicroelectronics NV ADR  vs.  Eshallgo Class A

STMicroelectronics NV ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in STMicroelectronics NV ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, STMicroelectronics displayed solid returns over the last few months and may actually be approaching a breakup point.

Eshallgo Class A

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eshallgo Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with STMicroelectronics and Eshallgo

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

The idea behind STMicroelectronics NV ADR and Eshallgo Class A 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..