Correlation Between STERLING FINANCIAL and AXAMANSARD INSURANCE
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By analyzing existing cross correlation between STERLING FINANCIAL HOLDINGS and AXAMANSARD INSURANCE PLC, you can compare the effects of market volatilities on STERLING FINANCIAL and AXAMANSARD INSURANCE 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 AXAMANSARD INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERLING FINANCIAL and AXAMANSARD INSURANCE.
Diversification Opportunities for STERLING FINANCIAL and AXAMANSARD INSURANCE
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between STERLING and AXAMANSARD is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding STERLING FINANCIAL HOLDINGS and AXAMANSARD INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXAMANSARD INSURANCE PLC 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 AXAMANSARD INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXAMANSARD INSURANCE PLC has no effect on the direction of STERLING FINANCIAL i.e., STERLING FINANCIAL and AXAMANSARD INSURANCE go up and down completely randomly.
Pair Corralation between STERLING FINANCIAL and AXAMANSARD INSURANCE
Assuming the 90 days trading horizon STERLING FINANCIAL HOLDINGS is expected to under-perform the AXAMANSARD INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, STERLING FINANCIAL HOLDINGS is 1.38 times less risky than AXAMANSARD INSURANCE. The stock trades about -0.02 of its potential returns per unit of risk. The AXAMANSARD INSURANCE PLC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 850.00 in AXAMANSARD INSURANCE PLC on October 26, 2024 and sell it today you would earn a total of 85.00 from holding AXAMANSARD INSURANCE PLC or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
STERLING FINANCIAL HOLDINGS vs. AXAMANSARD INSURANCE PLC
Performance |
| Timeline |
| STERLING FINANCIAL |
| AXAMANSARD INSURANCE PLC |
STERLING FINANCIAL and AXAMANSARD INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STERLING FINANCIAL and AXAMANSARD INSURANCE
The main advantage of trading using opposite STERLING FINANCIAL and AXAMANSARD INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERLING FINANCIAL position performs unexpectedly, AXAMANSARD INSURANCE 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 AXAMANSARD INSURANCE will offset losses from the drop in AXAMANSARD INSURANCE's long position.| STERLING FINANCIAL vs. TOTALENERGIES MARKETING NIGERIA | STERLING FINANCIAL vs. AFRICAN ALLIANCE INSURANCE | STERLING FINANCIAL vs. WEMA BANK PLC | STERLING FINANCIAL vs. CONSOLIDATED HALLMARK INSURANCE |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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