Correlation Between Ardiden and Sterling Check

Can any of the company-specific risk be diversified away by investing in both Ardiden and Sterling Check 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 Ardiden and Sterling Check into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ardiden Limited and Sterling Check Corp, you can compare the effects of market volatilities on Ardiden and Sterling Check 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 Ardiden with a short position of Sterling Check. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ardiden and Sterling Check.

Diversification Opportunities for Ardiden and Sterling Check

-0.65

Correlation Coefficient

Ardiden  Sterling Check

Excellent diversification

The 3 months correlation between Ardiden and Sterling is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ardiden Limited and Sterling Check Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Check Corp and Ardiden 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 Ardiden Limited are associated (or correlated) with Sterling Check. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Check Corp has no effect on the direction of Ardiden i.e., Ardiden and Sterling Check go up and down completely randomly.

Pair Corralation between Ardiden and Sterling Check

Assuming the 90 days horizon Ardiden Limited is expected to under-perform the Sterling Check. In addition to that, Ardiden is 10.36 times more volatile than Sterling Check Corp. It trades about -0.17 of its total potential returns per unit of risk. Sterling Check Corp is currently generating about 0.03 per unit of volatility. If you would invest  1,663  in Sterling Check Corp on September 26, 2024 and sell it today you would earn a total of  11.00  from holding Sterling Check Corp or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	41.27%
Values	Daily Returns

Ardiden Limited  vs.  Sterling Check Corp

Ardiden Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardiden Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Sterling Check Corp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Sterling Check Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Sterling Check is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ardiden and Sterling Check

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

The idea behind Ardiden Limited and Sterling Check Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.