Correlation Between Sterling Construction and Expeditors International
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and Expeditors International 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 Expeditors International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and Expeditors International of, you can compare the effects of market volatilities on Sterling Construction and Expeditors International 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 Expeditors International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and Expeditors International.
Diversification Opportunities for Sterling Construction and Expeditors International
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and Expeditors is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and Expeditors International of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expeditors International 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 Expeditors International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expeditors International has no effect on the direction of Sterling Construction i.e., Sterling Construction and Expeditors International go up and down completely randomly.
Pair Corralation between Sterling Construction and Expeditors International
Assuming the 90 days horizon Sterling Construction is expected to generate 2.91 times more return on investment than Expeditors International. However, Sterling Construction is 2.91 times more volatile than Expeditors International of. It trades about 0.05 of its potential returns per unit of risk. Expeditors International of is currently generating about 0.06 per unit of risk. If you would invest 17,160 in Sterling Construction on September 15, 2024 and sell it today you would earn a total of 350.00 from holding Sterling Construction or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sterling Construction vs. Expeditors International of
Performance |
| Timeline |
| Sterling Construction |
| Expeditors International |
Sterling Construction and Expeditors International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and Expeditors International
The main advantage of trading using opposite Sterling Construction and Expeditors International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, Expeditors International 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 Expeditors International will offset losses from the drop in Expeditors International'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 |
| Expeditors International vs. DAIRY FARM INTL | Expeditors International vs. TOREX SEMICONDUCTOR LTD | Expeditors International vs. Daito Trust Construction | Expeditors International vs. Sterling Construction |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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