Correlation Between STI Education and Integrated Micro

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

By analyzing existing cross correlation between STI Education Systems and Integrated Micro Electronics, you can compare the effects of market volatilities on STI Education and Integrated Micro 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 STI Education with a short position of Integrated Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and Integrated Micro.

Diversification Opportunities for STI Education and Integrated Micro

-0.51

Correlation Coefficient

STI Education  Integrated Micro

Excellent diversification

The 3 months correlation between STI and Integrated is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele and STI Education 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 STI Education Systems are associated (or correlated) with Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of STI Education i.e., STI Education and Integrated Micro go up and down completely randomly.

Pair Corralation between STI Education and Integrated Micro

Assuming the 90 days trading horizon STI Education is expected to generate 1.48 times less return on investment than Integrated Micro. But when comparing it to its historical volatility, STI Education Systems is 1.42 times less risky than Integrated Micro. It trades about 0.04 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  221.00  in Integrated Micro Electronics on April 24, 2025 and sell it today you would earn a total of  12.00  from holding Integrated Micro Electronics or generate 5.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

STI Education Systems  vs.  Integrated Micro Electronics

STI Education Systems

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in STI Education Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, STI Education may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Integrated Micro Ele

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Micro Electronics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Integrated Micro may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with STI Education and Integrated Micro

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

The idea behind STI Education Systems and Integrated Micro Electronics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.