Correlation Between Sterling Check and CCC Intelligent

Can any of the company-specific risk be diversified away by investing in both Sterling Check and CCC Intelligent 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 CCC Intelligent 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 CCC Intelligent Solutions, you can compare the effects of market volatilities on Sterling Check and CCC Intelligent 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 CCC Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Check and CCC Intelligent.

Diversification Opportunities for Sterling Check and CCC Intelligent

0.61

Correlation Coefficient

Sterling Check  CCC Intelligent

Poor diversification

The 3 months correlation between Sterling and CCC is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Check Corp and CCC Intelligent Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC Intelligent Solutions 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 CCC Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC Intelligent Solutions has no effect on the direction of Sterling Check i.e., Sterling Check and CCC Intelligent go up and down completely randomly.

Pair Corralation between Sterling Check and CCC Intelligent

Given the investment horizon of 90 days Sterling Check is expected to generate 5.76 times less return on investment than CCC Intelligent. In addition to that, Sterling Check is 1.02 times more volatile than CCC Intelligent Solutions. It trades about 0.02 of its total potential returns per unit of risk. CCC Intelligent Solutions is currently generating about 0.12 per unit of volatility. If you would invest  1,078  in CCC Intelligent Solutions on August 9, 2024 and sell it today you would earn a total of  39.00  from holding CCC Intelligent Solutions or generate 3.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	81.82%
Values	Daily Returns

Sterling Check Corp  vs.  CCC Intelligent Solutions

Sterling Check Corp

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Check Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Sterling Check may actually be approaching a critical reversion point that can send shares even higher in December 2024.

CCC Intelligent Solutions

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CCC Intelligent Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, CCC Intelligent may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Sterling Check and CCC Intelligent

The main advantage of trading using opposite Sterling Check and CCC Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Check position performs unexpectedly, CCC Intelligent 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 CCC Intelligent will offset losses from the drop in CCC Intelligent's long position.

The idea behind Sterling Check Corp and CCC Intelligent Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..