Correlation Between STMicroelectronics and Global Crossing
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics and Global Crossing 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 Global Crossing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Global Crossing Airlines, you can compare the effects of market volatilities on STMicroelectronics and Global Crossing 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 Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Global Crossing.
Diversification Opportunities for STMicroelectronics and Global Crossing
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STMicroelectronics and Global is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines 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 Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of STMicroelectronics i.e., STMicroelectronics and Global Crossing go up and down completely randomly.
Pair Corralation between STMicroelectronics and Global Crossing
Assuming the 90 days horizon STMicroelectronics NV is expected to under-perform the Global Crossing. But the pink sheet apears to be less risky and, when comparing its historical volatility, STMicroelectronics NV is 1.47 times less risky than Global Crossing. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Global Crossing Airlines is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 67.00 in Global Crossing Airlines on August 30, 2025 and sell it today you would lose (6.00) from holding Global Crossing Airlines or give up 8.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Global Crossing Airlines
Performance |
| Timeline |
| STMicroelectronics |
| Global Crossing Airlines |
STMicroelectronics and Global Crossing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Global Crossing
The main advantage of trading using opposite STMicroelectronics and Global Crossing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics position performs unexpectedly, Global Crossing 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 Global Crossing will offset losses from the drop in Global Crossing's long position.| STMicroelectronics vs. NVIDIA | STMicroelectronics vs. Broadcom | STMicroelectronics vs. Taiwan Semiconductor Manufacturing | STMicroelectronics vs. Advanced Micro Devices |
| Global Crossing vs. Playtika Holding Corp | Global Crossing vs. Telephone and Data | Global Crossing vs. National Storage REIT | Global Crossing vs. Travel Leisure Co |
Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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