Correlation Between Sterling Check and New Relic
Can any of the company-specific risk be diversified away by investing in both Sterling Check and New Relic 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 New Relic 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 New Relic, you can compare the effects of market volatilities on Sterling Check and New Relic 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 New Relic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Check and New Relic.
Diversification Opportunities for Sterling Check and New Relic
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and New is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Check Corp and New Relic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Relic 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 New Relic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Relic has no effect on the direction of Sterling Check i.e., Sterling Check and New Relic go up and down completely randomly.
Pair Corralation between Sterling Check and New Relic
Given the investment horizon of 90 days Sterling Check is expected to generate 1.66 times less return on investment than New Relic. But when comparing it to its historical volatility, Sterling Check Corp is 1.06 times less risky than New Relic. It trades about 0.03 of its potential returns per unit of risk. New Relic is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,454 in New Relic on October 23, 2024 and sell it today you would earn a total of 710.00 from holding New Relic or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 27.21% |
| Values | Daily Returns |
Sterling Check Corp vs. New Relic
Performance |
| Timeline |
| Sterling Check Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| New Relic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sterling Check and New Relic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Check and New Relic
The main advantage of trading using opposite Sterling Check and New Relic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Check position performs unexpectedly, New Relic 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 New Relic will offset losses from the drop in New Relic'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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |