Correlation Between OFFICE DEPOT and Sterling Construction
Can any of the company-specific risk be diversified away by investing in both OFFICE DEPOT 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 OFFICE DEPOT and Sterling Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OFFICE DEPOT and Sterling Construction, you can compare the effects of market volatilities on OFFICE DEPOT 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 OFFICE DEPOT with a short position of Sterling Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of OFFICE DEPOT and Sterling Construction.
Diversification Opportunities for OFFICE DEPOT and Sterling Construction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OFFICE and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding OFFICE DEPOT and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction and OFFICE DEPOT 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 OFFICE DEPOT 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 OFFICE DEPOT i.e., OFFICE DEPOT and Sterling Construction go up and down completely randomly.
Pair Corralation between OFFICE DEPOT and Sterling Construction
If you would invest 4,920 in Sterling Construction on August 31, 2024 and sell it today you would earn a total of 13,390 from holding Sterling Construction or generate 272.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
OFFICE DEPOT vs. Sterling Construction
Performance |
| Timeline |
| OFFICE DEPOT |
| Sterling Construction |
OFFICE DEPOT and Sterling Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OFFICE DEPOT and Sterling Construction
The main advantage of trading using opposite OFFICE DEPOT and Sterling Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OFFICE DEPOT 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.| OFFICE DEPOT vs. National Retail Properties | OFFICE DEPOT vs. Goosehead Insurance | OFFICE DEPOT vs. The Trade Desk | OFFICE DEPOT vs. AUTO TRADER ADR |
| Sterling Construction vs. Larsen Toubro Limited | Sterling Construction vs. Superior Plus Corp | Sterling Construction vs. NMI Holdings | Sterling Construction vs. Origin Agritech |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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