Correlation Between Sterling Check and ACI Worldwide
Can any of the company-specific risk be diversified away by investing in both Sterling Check and ACI Worldwide 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 Sterling Check and ACI Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Check Corp and ACI Worldwide, you can compare the effects of market volatilities on Sterling Check and ACI Worldwide 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 Sterling Check with a short position of ACI Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Check and ACI Worldwide.
Diversification Opportunities for Sterling Check and ACI Worldwide
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and ACI is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Check Corp and ACI Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACI Worldwide and Sterling Check 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 Sterling Check Corp are associated (or correlated) with ACI Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACI Worldwide has no effect on the direction of Sterling Check i.e., Sterling Check and ACI Worldwide go up and down completely randomly.
Pair Corralation between Sterling Check and ACI Worldwide
Given the investment horizon of 90 days Sterling Check is expected to generate 21.9 times less return on investment than ACI Worldwide. But when comparing it to its historical volatility, Sterling Check Corp is 1.95 times less risky than ACI Worldwide. It trades about 0.01 of its potential returns per unit of risk. ACI Worldwide is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,090 in ACI Worldwide on August 31, 2024 and sell it today you would earn a total of 576.00 from holding ACI Worldwide or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.55% |
| Values | Daily Returns |
Sterling Check Corp vs. ACI Worldwide
Performance |
| Timeline |
| Sterling Check Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| ACI Worldwide |
Sterling Check and ACI Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Check and ACI Worldwide
The main advantage of trading using opposite Sterling Check and ACI Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Check position performs unexpectedly, ACI Worldwide 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 ACI Worldwide will offset losses from the drop in ACI Worldwide's long position.| Sterling Check vs. EverCommerce | Sterling Check vs. Evertec | Sterling Check vs. Consensus Cloud Solutions | Sterling Check vs. CSG Systems International |
| ACI Worldwide vs. NetScout Systems | ACI Worldwide vs. Consensus Cloud Solutions | ACI Worldwide vs. CSG Systems International | ACI Worldwide vs. Remitly Global |
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.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |