Correlation Between GOLDLINK INSURANCE and STERLING FINANCIAL

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

By analyzing existing cross correlation between GOLDLINK INSURANCE PLC and STERLING FINANCIAL HOLDINGS, you can compare the effects of market volatilities on GOLDLINK INSURANCE and STERLING FINANCIAL 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 GOLDLINK INSURANCE with a short position of STERLING FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDLINK INSURANCE and STERLING FINANCIAL.

Diversification Opportunities for GOLDLINK INSURANCE and STERLING FINANCIAL

0.0

Correlation Coefficient

GOLDLINK INSURANCE  STERLING FINANCIAL

Pay attention - limited upside

The 3 months correlation between GOLDLINK and STERLING is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GOLDLINK INSURANCE PLC and STERLING FINANCIAL HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STERLING FINANCIAL and GOLDLINK INSURANCE 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 GOLDLINK INSURANCE PLC are associated (or correlated) with STERLING FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STERLING FINANCIAL has no effect on the direction of GOLDLINK INSURANCE i.e., GOLDLINK INSURANCE and STERLING FINANCIAL go up and down completely randomly.

Pair Corralation between GOLDLINK INSURANCE and STERLING FINANCIAL

If you would invest  399.00  in STERLING FINANCIAL HOLDINGS on September 14, 2024 and sell it today you would earn a total of  86.00  from holding STERLING FINANCIAL HOLDINGS or generate 21.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

GOLDLINK INSURANCE PLC  vs.  STERLING FINANCIAL HOLDINGS

GOLDLINK INSURANCE PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GOLDLINK INSURANCE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GOLDLINK INSURANCE is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

STERLING FINANCIAL

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in STERLING FINANCIAL HOLDINGS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, STERLING FINANCIAL displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GOLDLINK INSURANCE and STERLING FINANCIAL

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

The idea behind GOLDLINK INSURANCE PLC and STERLING FINANCIAL HOLDINGS 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.