Correlation Between Sterling Check and I3 Verticals
Can any of the company-specific risk be diversified away by investing in both Sterling Check and I3 Verticals 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 I3 Verticals 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 i3 Verticals, you can compare the effects of market volatilities on Sterling Check and I3 Verticals 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 I3 Verticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Check and I3 Verticals.
Diversification Opportunities for Sterling Check and I3 Verticals
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and IIIV is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Check Corp and i3 Verticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i3 Verticals 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 I3 Verticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i3 Verticals has no effect on the direction of Sterling Check i.e., Sterling Check and I3 Verticals go up and down completely randomly.
Pair Corralation between Sterling Check and I3 Verticals
Given the investment horizon of 90 days Sterling Check Corp is expected to under-perform the I3 Verticals. But the stock apears to be less risky and, when comparing its historical volatility, Sterling Check Corp is 1.47 times less risky than I3 Verticals. The stock trades about -0.38 of its potential returns per unit of risk. The i3 Verticals is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,275 in i3 Verticals on August 24, 2024 and sell it today you would earn a total of 63.00 from holding i3 Verticals or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 30.43% |
| Values | Daily Returns |
Sterling Check Corp vs. i3 Verticals
Performance |
| Timeline |
| Sterling Check Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| i3 Verticals |
Sterling Check and I3 Verticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Check and I3 Verticals
The main advantage of trading using opposite Sterling Check and I3 Verticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Check position performs unexpectedly, I3 Verticals 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 I3 Verticals will offset losses from the drop in I3 Verticals' long position.| Sterling Check vs. EverCommerce | Sterling Check vs. Evertec | Sterling Check vs. Consensus Cloud Solutions | Sterling Check vs. CSG Systems International |
| I3 Verticals vs. Evertec | I3 Verticals vs. Couchbase | I3 Verticals vs. Flywire Corp | I3 Verticals vs. Euronet Worldwide |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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