Correlation Between Sterling Construction and Agricultural Bank
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and Agricultural Bank 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 Agricultural Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and Agricultural Bank of, you can compare the effects of market volatilities on Sterling Construction and Agricultural Bank 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 Agricultural Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and Agricultural Bank.
Diversification Opportunities for Sterling Construction and Agricultural Bank
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and Agricultural is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and Agricultural Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agricultural Bank 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 Agricultural Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agricultural Bank has no effect on the direction of Sterling Construction i.e., Sterling Construction and Agricultural Bank go up and down completely randomly.
Pair Corralation between Sterling Construction and Agricultural Bank
Assuming the 90 days horizon Sterling Construction is expected to generate 2.38 times less return on investment than Agricultural Bank. But when comparing it to its historical volatility, Sterling Construction is 2.65 times less risky than Agricultural Bank. It trades about 0.1 of its potential returns per unit of risk. Agricultural Bank of is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Agricultural Bank of on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Agricultural Bank of or generate 363.64% 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. Agricultural Bank of
Performance |
| Timeline |
| Sterling Construction |
| Agricultural Bank |
Sterling Construction and Agricultural Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and Agricultural Bank
The main advantage of trading using opposite Sterling Construction and Agricultural Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, Agricultural Bank 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 Agricultural Bank will offset losses from the drop in Agricultural Bank'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 |
| Agricultural Bank vs. GEAR4MUSIC LS 10 | Agricultural Bank vs. Sterling Construction | Agricultural Bank vs. ALEFARM BREWING DK 05 | Agricultural Bank vs. Dairy Farm 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |