Correlation Between STERLING FINANCIAL and GUARANTY TRUST
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By analyzing existing cross correlation between STERLING FINANCIAL HOLDINGS and GUARANTY TRUST HOLDING, you can compare the effects of market volatilities on STERLING FINANCIAL and GUARANTY TRUST 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 FINANCIAL with a short position of GUARANTY TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERLING FINANCIAL and GUARANTY TRUST.
Diversification Opportunities for STERLING FINANCIAL and GUARANTY TRUST
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STERLING and GUARANTY is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding STERLING FINANCIAL HOLDINGS and GUARANTY TRUST HOLDING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUARANTY TRUST HOLDING and STERLING FINANCIAL 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 FINANCIAL HOLDINGS are associated (or correlated) with GUARANTY TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUARANTY TRUST HOLDING has no effect on the direction of STERLING FINANCIAL i.e., STERLING FINANCIAL and GUARANTY TRUST go up and down completely randomly.
Pair Corralation between STERLING FINANCIAL and GUARANTY TRUST
Assuming the 90 days trading horizon STERLING FINANCIAL HOLDINGS is expected to generate 2.03 times more return on investment than GUARANTY TRUST. However, STERLING FINANCIAL is 2.03 times more volatile than GUARANTY TRUST HOLDING. It trades about 0.1 of its potential returns per unit of risk. GUARANTY TRUST HOLDING is currently generating about 0.14 per unit of risk. If you would invest 480.00 in STERLING FINANCIAL HOLDINGS on October 19, 2024 and sell it today you would earn a total of 87.00 from holding STERLING FINANCIAL HOLDINGS or generate 18.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
STERLING FINANCIAL HOLDINGS vs. GUARANTY TRUST HOLDING
Performance |
Timeline |
STERLING FINANCIAL |
GUARANTY TRUST HOLDING |
STERLING FINANCIAL and GUARANTY TRUST Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with STERLING FINANCIAL and GUARANTY TRUST
The main advantage of trading using opposite STERLING FINANCIAL and GUARANTY TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERLING FINANCIAL position performs unexpectedly, GUARANTY TRUST 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 GUARANTY TRUST will offset losses from the drop in GUARANTY TRUST's long position.STERLING FINANCIAL vs. ZENITH BANK PLC | ||
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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