Correlation Between Sterling Check and Verisk Analytics
Can any of the company-specific risk be diversified away by investing in both Sterling Check and Verisk Analytics 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 Check and Verisk Analytics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Check Corp and Verisk Analytics, you can compare the effects of market volatilities on Sterling Check and Verisk Analytics 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 Check with a short position of Verisk Analytics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Check and Verisk Analytics.
Diversification Opportunities for Sterling Check and Verisk Analytics
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sterling and Verisk is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Check Corp and Verisk Analytics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verisk Analytics and Sterling Check 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 Check Corp are associated (or correlated) with Verisk Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verisk Analytics has no effect on the direction of Sterling Check i.e., Sterling Check and Verisk Analytics go up and down completely randomly.
Pair Corralation between Sterling Check and Verisk Analytics
Given the investment horizon of 90 days Sterling Check Corp is expected to under-perform the Verisk Analytics. But the stock apears to be less risky and, when comparing its historical volatility, Sterling Check Corp is 1.6 times less risky than Verisk Analytics. The stock trades about -0.11 of its potential returns per unit of risk. The Verisk Analytics is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 22,652 in Verisk Analytics on February 4, 2024 and sell it today you would earn a total of 1,081 from holding Verisk Analytics or generate 4.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sterling Check Corp vs. Verisk Analytics
Performance |
Timeline |
Sterling Check Corp |
Verisk Analytics |
Sterling Check and Verisk Analytics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sterling Check and Verisk Analytics
The main advantage of trading using opposite Sterling Check and Verisk Analytics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Check position performs unexpectedly, Verisk Analytics 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 Verisk Analytics will offset losses from the drop in Verisk Analytics' long position.Sterling Check vs. EverCommerce | Sterling Check vs. Evertec | Sterling Check vs. Consensus Cloud Solutions | Sterling Check vs. CSG Systems International |
Verisk Analytics vs. Team Inc | Verisk Analytics vs. Thermon Group Holdings | Verisk Analytics vs. MRC Global | Verisk Analytics vs. Vishay Precision Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Transaction History View history of all your transactions and understand their impact on performance | |
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Stocks Directory Find actively traded stocks across global markets |