Correlation Between Sterling Construction and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and ANGANG STEEL 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 ANGANG STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and ANGANG STEEL H , you can compare the effects of market volatilities on Sterling Construction and ANGANG STEEL 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 ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and ANGANG STEEL.
Diversification Opportunities for Sterling Construction and ANGANG STEEL
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and ANGANG is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H 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 ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of Sterling Construction i.e., Sterling Construction and ANGANG STEEL go up and down completely randomly.
Pair Corralation between Sterling Construction and ANGANG STEEL
Assuming the 90 days horizon Sterling Construction is expected to generate 1.38 times more return on investment than ANGANG STEEL. However, Sterling Construction is 1.38 times more volatile than ANGANG STEEL H . It trades about -0.12 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about -0.23 per unit of risk. If you would invest 17,510 in Sterling Construction on October 13, 2024 and sell it today you would lose (1,425) from holding Sterling Construction or give up 8.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. ANGANG STEEL H
Performance |
| Timeline |
| Sterling Construction |
| ANGANG STEEL H |
Sterling Construction and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and ANGANG STEEL
The main advantage of trading using opposite Sterling Construction and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL's long position.| Sterling Construction vs. CanSino Biologics | Sterling Construction vs. Commercial Vehicle Group | Sterling Construction vs. Geely Automobile Holdings | Sterling Construction vs. Grupo Carso SAB |
| ANGANG STEEL vs. Federal Agricultural Mortgage | ANGANG STEEL vs. Hanison Construction Holdings | ANGANG STEEL vs. Sterling Construction | ANGANG STEEL vs. Tencent Music Entertainment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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