Correlation Between Sterling Construction and BANKINTER ADR
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and BANKINTER ADR 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 Construction and BANKINTER ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and BANKINTER ADR 2007, you can compare the effects of market volatilities on Sterling Construction and BANKINTER ADR 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 Construction with a short position of BANKINTER ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and BANKINTER ADR.
Diversification Opportunities for Sterling Construction and BANKINTER ADR
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and BANKINTER is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and BANKINTER ADR 2007 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANKINTER ADR 2007 and Sterling Construction 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 Construction are associated (or correlated) with BANKINTER ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANKINTER ADR 2007 has no effect on the direction of Sterling Construction i.e., Sterling Construction and BANKINTER ADR go up and down completely randomly.
Pair Corralation between Sterling Construction and BANKINTER ADR
Assuming the 90 days horizon Sterling Construction is expected to under-perform the BANKINTER ADR. In addition to that, Sterling Construction is 1.9 times more volatile than BANKINTER ADR 2007. It trades about -0.01 of its total potential returns per unit of risk. BANKINTER ADR 2007 is currently generating about 0.19 per unit of volatility. If you would invest 684.00 in BANKINTER ADR 2007 on October 16, 2024 and sell it today you would earn a total of 86.00 from holding BANKINTER ADR 2007 or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. BANKINTER ADR 2007
Performance |
| Timeline |
| Sterling Construction |
| BANKINTER ADR 2007 |
Sterling Construction and BANKINTER ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and BANKINTER ADR
The main advantage of trading using opposite Sterling Construction and BANKINTER ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, BANKINTER ADR 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 BANKINTER ADR will offset losses from the drop in BANKINTER ADR's long position.| Sterling Construction vs. GRIFFIN MINING LTD | Sterling Construction vs. GALENA MINING LTD | Sterling Construction vs. Stag Industrial | Sterling Construction vs. Perseus Mining Limited |
| BANKINTER ADR vs. Sterling Construction | BANKINTER ADR vs. AWILCO DRILLING PLC | BANKINTER ADR vs. PURETECH HEALTH PLC | BANKINTER ADR vs. WESANA HEALTH HOLD |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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