Correlation Between Commercial Vehicle and Sterling Construction
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle and Sterling Construction 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 Commercial Vehicle and Sterling Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and Sterling Construction, you can compare the effects of market volatilities on Commercial Vehicle and Sterling Construction 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 Commercial Vehicle with a short position of Sterling Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and Sterling Construction.
Diversification Opportunities for Commercial Vehicle and Sterling Construction
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commercial and Sterling is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with Sterling Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Construction has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and Sterling Construction go up and down completely randomly.
Pair Corralation between Commercial Vehicle and Sterling Construction
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to generate 0.94 times more return on investment than Sterling Construction. However, Commercial Vehicle Group is 1.06 times less risky than Sterling Construction. It trades about -0.11 of its potential returns per unit of risk. Sterling Construction is currently generating about -0.16 per unit of risk. If you would invest 228.00 in Commercial Vehicle Group on October 12, 2024 and sell it today you would lose (18.00) from holding Commercial Vehicle Group or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Commercial Vehicle Group vs. Sterling Construction
Performance |
| Timeline |
| Commercial Vehicle |
| Sterling Construction |
Commercial Vehicle and Sterling Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and Sterling Construction
The main advantage of trading using opposite Commercial Vehicle and Sterling Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle position performs unexpectedly, Sterling Construction 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 Sterling Construction will offset losses from the drop in Sterling Construction's long position.| Commercial Vehicle vs. CSSC Offshore Marine | Commercial Vehicle vs. Solstad Offshore ASA | Commercial Vehicle vs. ANTA SPORTS PRODUCT | Commercial Vehicle vs. Haier Smart Home |
| Sterling Construction vs. CanSino Biologics | Sterling Construction vs. Commercial Vehicle Group | Sterling Construction vs. Geely Automobile Holdings | Sterling Construction vs. Grupo Carso SAB |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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