Correlation Between STERLING FINANCIAL and INTERNATIONAL ENERGY
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By analyzing existing cross correlation between STERLING FINANCIAL HOLDINGS and INTERNATIONAL ENERGY INSURANCE, you can compare the effects of market volatilities on STERLING FINANCIAL and INTERNATIONAL ENERGY 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 FINANCIAL with a short position of INTERNATIONAL ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERLING FINANCIAL and INTERNATIONAL ENERGY.
Diversification Opportunities for STERLING FINANCIAL and INTERNATIONAL ENERGY
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STERLING and INTERNATIONAL is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding STERLING FINANCIAL HOLDINGS and INTERNATIONAL ENERGY INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL ENERGY and STERLING FINANCIAL 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 FINANCIAL HOLDINGS are associated (or correlated) with INTERNATIONAL ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL ENERGY has no effect on the direction of STERLING FINANCIAL i.e., STERLING FINANCIAL and INTERNATIONAL ENERGY go up and down completely randomly.
Pair Corralation between STERLING FINANCIAL and INTERNATIONAL ENERGY
Assuming the 90 days trading horizon STERLING FINANCIAL is expected to generate 1.18 times less return on investment than INTERNATIONAL ENERGY. But when comparing it to its historical volatility, STERLING FINANCIAL HOLDINGS is 1.19 times less risky than INTERNATIONAL ENERGY. It trades about 0.07 of its potential returns per unit of risk. INTERNATIONAL ENERGY INSURANCE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 159.00 in INTERNATIONAL ENERGY INSURANCE on October 24, 2024 and sell it today you would earn a total of 31.00 from holding INTERNATIONAL ENERGY INSURANCE or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STERLING FINANCIAL HOLDINGS vs. INTERNATIONAL ENERGY INSURANCE
Performance |
| Timeline |
| STERLING FINANCIAL |
| INTERNATIONAL ENERGY |
STERLING FINANCIAL and INTERNATIONAL ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STERLING FINANCIAL and INTERNATIONAL ENERGY
The main advantage of trading using opposite STERLING FINANCIAL and INTERNATIONAL ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERLING FINANCIAL position performs unexpectedly, INTERNATIONAL ENERGY 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 INTERNATIONAL ENERGY will offset losses from the drop in INTERNATIONAL ENERGY's long position.| STERLING FINANCIAL vs. CONSOLIDATED HALLMARK INSURANCE | STERLING FINANCIAL vs. UNITED BANK FOR | STERLING FINANCIAL vs. NEM INSURANCE PLC | STERLING FINANCIAL vs. INTERNATIONAL ENERGY INSURANCE |
| INTERNATIONAL ENERGY vs. FIDELITY BANK PLC | INTERNATIONAL ENERGY vs. STACO INSURANCE PLC | INTERNATIONAL ENERGY vs. STERLING FINANCIAL HOLDINGS | INTERNATIONAL ENERGY vs. AFROMEDIA PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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