Correlation Between Sterling Construction and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and Thermo Fisher 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 Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and Thermo Fisher Scientific, you can compare the effects of market volatilities on Sterling Construction and Thermo Fisher 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 Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and Thermo Fisher.
Diversification Opportunities for Sterling Construction and Thermo Fisher
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sterling and Thermo is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific 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 Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of Sterling Construction i.e., Sterling Construction and Thermo Fisher go up and down completely randomly.
Pair Corralation between Sterling Construction and Thermo Fisher
Assuming the 90 days horizon Sterling Construction is expected to generate 1.7 times more return on investment than Thermo Fisher. However, Sterling Construction is 1.7 times more volatile than Thermo Fisher Scientific. It trades about 0.04 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.05 per unit of risk. If you would invest 17,730 in Sterling Construction on September 14, 2024 and sell it today you would earn a total of 340.00 from holding Sterling Construction or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. Thermo Fisher Scientific
Performance |
| Timeline |
| Sterling Construction |
| Thermo Fisher Scientific |
Sterling Construction and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and Thermo Fisher
The main advantage of trading using opposite Sterling Construction and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher'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 |
| Thermo Fisher vs. Penta Ocean Construction Co | Thermo Fisher vs. Coeur Mining | Thermo Fisher vs. Sterling Construction | Thermo Fisher vs. Granite 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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