Correlation Between STERLING FINANCIAL and CORNERSTONE INSURANCE
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By analyzing existing cross correlation between STERLING FINANCIAL HOLDINGS and CORNERSTONE INSURANCE PLC, you can compare the effects of market volatilities on STERLING FINANCIAL and CORNERSTONE INSURANCE 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 CORNERSTONE INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERLING FINANCIAL and CORNERSTONE INSURANCE.
Diversification Opportunities for STERLING FINANCIAL and CORNERSTONE INSURANCE
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between STERLING and CORNERSTONE is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding STERLING FINANCIAL HOLDINGS and CORNERSTONE INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNERSTONE INSURANCE PLC 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 CORNERSTONE INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNERSTONE INSURANCE PLC has no effect on the direction of STERLING FINANCIAL i.e., STERLING FINANCIAL and CORNERSTONE INSURANCE go up and down completely randomly.
Pair Corralation between STERLING FINANCIAL and CORNERSTONE INSURANCE
Assuming the 90 days trading horizon STERLING FINANCIAL is expected to generate 2.67 times less return on investment than CORNERSTONE INSURANCE. But when comparing it to its historical volatility, STERLING FINANCIAL HOLDINGS is 1.42 times less risky than CORNERSTONE INSURANCE. It trades about 0.13 of its potential returns per unit of risk. CORNERSTONE INSURANCE PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 340.00 in CORNERSTONE INSURANCE PLC on May 28, 2025 and sell it today you would earn a total of 370.00 from holding CORNERSTONE INSURANCE PLC or generate 108.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
STERLING FINANCIAL HOLDINGS vs. CORNERSTONE INSURANCE PLC
Performance |
| Timeline |
| STERLING FINANCIAL |
| CORNERSTONE INSURANCE PLC |
STERLING FINANCIAL and CORNERSTONE INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STERLING FINANCIAL and CORNERSTONE INSURANCE
The main advantage of trading using opposite STERLING FINANCIAL and CORNERSTONE INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERLING FINANCIAL position performs unexpectedly, CORNERSTONE INSURANCE 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 CORNERSTONE INSURANCE will offset losses from the drop in CORNERSTONE INSURANCE's long position.| STERLING FINANCIAL vs. DN TYRE RUBBER | STERLING FINANCIAL vs. AFRICAN ALLIANCE INSURANCE | STERLING FINANCIAL vs. BUA FOODS PLC | STERLING FINANCIAL vs. MULTI TREX INTEGRATED FOODS |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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