Correlation Between Cheops Technology and STMicroelectronics

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

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

Diversification Opportunities for Cheops Technology and STMicroelectronics

-0.27

Correlation Coefficient

Cheops Technology  STMicroelectronics

Very good diversification

The 3 months correlation between Cheops and STMicroelectronics is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cheops Technology France and STMicroelectronics NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMicroelectronics and Cheops Technology 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 Cheops Technology France 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 Cheops Technology i.e., Cheops Technology and STMicroelectronics go up and down completely randomly.

Pair Corralation between Cheops Technology and STMicroelectronics

Assuming the 90 days trading horizon Cheops Technology France is expected to under-perform the STMicroelectronics. In addition to that, Cheops Technology is 1.07 times more volatile than STMicroelectronics NV. It trades about -0.01 of its total potential returns per unit of risk. STMicroelectronics NV is currently generating about 0.22 per unit of volatility. If you would invest  2,018  in STMicroelectronics NV on April 24, 2025 and sell it today you would earn a total of  798.00  from holding STMicroelectronics NV or generate 39.54% return on investment over 90 days.

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

Cheops Technology France  vs.  STMicroelectronics NV

Cheops Technology France

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cheops Technology France has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Cheops Technology is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

STMicroelectronics

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in STMicroelectronics NV are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, STMicroelectronics reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheops Technology and STMicroelectronics

The main advantage of trading using opposite Cheops Technology and STMicroelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheops Technology 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 Cheops Technology France 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.