Correlation Between Sterling Construction and Blackstone
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and Blackstone 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 Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and Blackstone Group, you can compare the effects of market volatilities on Sterling Construction and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and Blackstone.
Diversification Opportunities for Sterling Construction and Blackstone
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sterling and Blackstone is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Sterling Construction i.e., Sterling Construction and Blackstone go up and down completely randomly.
Pair Corralation between Sterling Construction and Blackstone
Assuming the 90 days horizon Sterling Construction is expected to generate 1.44 times more return on investment than Blackstone. However, Sterling Construction is 1.44 times more volatile than Blackstone Group. It trades about 0.13 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.11 per unit of risk. If you would invest 3,040 in Sterling Construction on September 12, 2024 and sell it today you would earn a total of 14,315 from holding Sterling Construction or generate 470.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. Blackstone Group
Performance |
| Timeline |
| Sterling Construction |
| Blackstone Group |
Sterling Construction and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and Blackstone
The main advantage of trading using opposite Sterling Construction and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| Sterling Construction vs. Superior Plus Corp | Sterling Construction vs. SIVERS SEMICONDUCTORS AB | Sterling Construction vs. Norsk Hydro ASA | Sterling Construction vs. Reliance Steel Aluminum |
| Blackstone vs. ANTA SPORTS PRODUCT | Blackstone vs. Sterling Construction | Blackstone vs. North American Construction | Blackstone vs. Penta Ocean Construction Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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