Correlation Between STMicroelectronics and ASM International

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

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

Diversification Opportunities for STMicroelectronics and ASM International

0.0

Correlation Coefficient

STMicroelectronics  ASM International

Pay attention - limited upside

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

Pair Corralation between STMicroelectronics and ASM International

If you would invest  2,340  in STMicroelectronics NV on May 6, 2025 and sell it today you would earn a total of  158.00  from holding STMicroelectronics NV or generate 6.75% return on investment over 90 days.

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

STMicroelectronics NV  vs.  ASM International NV

STMicroelectronics

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in STMicroelectronics NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, STMicroelectronics may actually be approaching a critical reversion point that can send shares even higher in September 2025.

ASM International

Risk-Adjusted Performance

Very Weak

Over the last 90 days ASM International NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, ASM International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with STMicroelectronics and ASM International

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

The idea behind STMicroelectronics NV and ASM International 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 Anywhere module to track or share privately all of your investments from the convenience of any device.