Correlation Between AOI Electronics and Sterling Construction
Can any of the company-specific risk be diversified away by investing in both AOI Electronics 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 AOI Electronics and Sterling Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOI Electronics Co and Sterling Construction, you can compare the effects of market volatilities on AOI Electronics 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 AOI Electronics with a short position of Sterling Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and Sterling Construction.
Diversification Opportunities for AOI Electronics and Sterling Construction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction and AOI Electronics 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 AOI Electronics Co 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 AOI Electronics i.e., AOI Electronics and Sterling Construction go up and down completely randomly.
Pair Corralation between AOI Electronics and Sterling Construction
If you would invest 5,350 in Sterling Construction on August 28, 2024 and sell it today you would earn a total of 13,405 from holding Sterling Construction or generate 250.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOI Electronics Co vs. Sterling Construction
Performance |
| Timeline |
| AOI Electronics |
| Sterling Construction |
AOI Electronics and Sterling Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOI Electronics and Sterling Construction
The main advantage of trading using opposite AOI Electronics and Sterling Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics 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.| AOI Electronics vs. NVIDIA | AOI Electronics vs. NVIDIA | AOI Electronics vs. QUALCOMM Incorporated | AOI Electronics vs. Intel |
| Sterling Construction vs. Seven West Media | Sterling Construction vs. ZINC MEDIA GR | Sterling Construction vs. AWILCO DRILLING PLC | Sterling Construction vs. ATRESMEDIA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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