Correlation Between Sterling Construction and TUI AG
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By analyzing existing cross correlation between Sterling Construction and TUI AG, you can compare the effects of market volatilities on Sterling Construction and TUI AG 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 TUI AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and TUI AG.
Diversification Opportunities for Sterling Construction and TUI AG
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and TUI is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and TUI AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TUI AG 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 TUI AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TUI AG has no effect on the direction of Sterling Construction i.e., Sterling Construction and TUI AG go up and down completely randomly.
Pair Corralation between Sterling Construction and TUI AG
Assuming the 90 days horizon Sterling Construction is expected to generate 1.15 times more return on investment than TUI AG. However, Sterling Construction is 1.15 times more volatile than TUI AG. It trades about 0.13 of its potential returns per unit of risk. TUI AG is currently generating about 0.02 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. TUI AG
Performance |
| Timeline |
| Sterling Construction |
| TUI AG |
Sterling Construction and TUI AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and TUI AG
The main advantage of trading using opposite Sterling Construction and TUI AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, TUI AG 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 TUI AG will offset losses from the drop in TUI AG'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 |
| TUI AG vs. INTER CARS SA | TUI AG vs. Cars Inc | TUI AG vs. Dairy Farm International | TUI AG 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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