Correlation Between Sterling Construction and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both Sterling Construction and Sany Heavy 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 Sany Heavy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and Sany Heavy Equipment, you can compare the effects of market volatilities on Sterling Construction and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and Sany Heavy.
Diversification Opportunities for Sterling Construction and Sany Heavy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and Sany is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of Sterling Construction i.e., Sterling Construction and Sany Heavy go up and down completely randomly.
Pair Corralation between Sterling Construction and Sany Heavy
Assuming the 90 days horizon Sterling Construction is expected to generate 1.15 times more return on investment than Sany Heavy. However, Sterling Construction is 1.15 times more volatile than Sany Heavy Equipment. It trades about 0.06 of its potential returns per unit of risk. Sany Heavy Equipment is currently generating about 0.05 per unit of risk. If you would invest 9,782 in Sterling Construction on December 4, 2024 and sell it today you would earn a total of 2,373 from holding Sterling Construction or generate 24.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. Sany Heavy Equipment
Performance |
| Timeline |
| Sterling Construction |
| Sany Heavy Equipment |
Sterling Construction and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and Sany Heavy
The main advantage of trading using opposite Sterling Construction and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.| Sterling Construction vs. NTT DATA | Sterling Construction vs. SALESFORCE INC CDR | Sterling Construction vs. SIDETRADE EO 1 | Sterling Construction vs. Tradegate AG Wertpapierhandelsbank |
| Sany Heavy vs. LG Electronics | Sany Heavy vs. STMICROELECTRONICS | Sany Heavy vs. Nanjing Panda Electronics | Sany Heavy vs. SALESFORCE INC CDR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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