Correlation Between STMicroelectronics and Crypto

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

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

Diversification Opportunities for STMicroelectronics and Crypto

0.21

Correlation Coefficient

STMicroelectronics  Crypto

Modest diversification

The 3 months correlation between STMicroelectronics and Crypto is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Crypto Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crypto 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 Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crypto has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Crypto go up and down completely randomly.

Pair Corralation between STMicroelectronics and Crypto

Assuming the 90 days horizon STMicroelectronics NV is expected to generate 0.57 times more return on investment than Crypto. However, STMicroelectronics NV is 1.76 times less risky than Crypto. It trades about 0.07 of its potential returns per unit of risk. Crypto Co is currently generating about 0.03 per unit of risk. If you would invest  2,333  in STMicroelectronics NV on May 2, 2025 and sell it today you would earn a total of  297.00  from holding STMicroelectronics NV or generate 12.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

STMicroelectronics NV  vs.  Crypto Co

STMicroelectronics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in STMicroelectronics NV are ranked lower than 5 (%) 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.

Crypto

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crypto Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady fundamental indicators, Crypto may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with STMicroelectronics and Crypto

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

The idea behind STMicroelectronics NV and Crypto Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.