Correlation Between Sterling Check and Dlocal
Can any of the company-specific risk be diversified away by investing in both Sterling Check and Dlocal 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 Dlocal 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 Dlocal, you can compare the effects of market volatilities on Sterling Check and Dlocal 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 Dlocal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Check and Dlocal.
Diversification Opportunities for Sterling Check and Dlocal
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and Dlocal is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Check Corp and Dlocal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dlocal 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 Dlocal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dlocal has no effect on the direction of Sterling Check i.e., Sterling Check and Dlocal go up and down completely randomly.
Pair Corralation between Sterling Check and Dlocal
Given the investment horizon of 90 days Sterling Check Corp is expected to generate 0.7 times more return on investment than Dlocal. However, Sterling Check Corp is 1.44 times less risky than Dlocal. It trades about 0.07 of its potential returns per unit of risk. Dlocal is currently generating about -0.01 per unit of risk. If you would invest 1,326 in Sterling Check Corp on November 3, 2024 and sell it today you would earn a total of 348.00 from holding Sterling Check Corp or generate 26.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 75.0% |
| Values | Daily Returns |
Sterling Check Corp vs. Dlocal
Performance |
| Timeline |
| Sterling Check Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dlocal |
Sterling Check and Dlocal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Check and Dlocal
The main advantage of trading using opposite Sterling Check and Dlocal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Check position performs unexpectedly, Dlocal 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 Dlocal will offset losses from the drop in Dlocal's long position.| Sterling Check vs. EverCommerce | Sterling Check vs. Evertec | Sterling Check vs. Consensus Cloud Solutions | Sterling Check vs. CSG Systems International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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