Correlation Between Tutor Perini and Sterling Construction

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

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

Diversification Opportunities for Tutor Perini and Sterling Construction

0.8

Correlation Coefficient

Tutor Perini  Sterling Construction

Very poor diversification

The 3 months correlation between Tutor and Sterling is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Tutor Perini and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction and Tutor Perini 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 Tutor Perini are associated (or correlated) with Sterling Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Construction has no effect on the direction of Tutor Perini i.e., Tutor Perini and Sterling Construction go up and down completely randomly.

Pair Corralation between Tutor Perini and Sterling Construction

Considering the 90-day investment horizon Tutor Perini is expected to generate 1.34 times less return on investment than Sterling Construction. But when comparing it to its historical volatility, Tutor Perini is 1.17 times less risky than Sterling Construction. It trades about 0.16 of its potential returns per unit of risk. Sterling Construction is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  24,765  in Sterling Construction on July 21, 2025 and sell it today you would earn a total of  10,793  from holding Sterling Construction or generate 43.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Tutor Perini  vs.  Sterling Construction

Tutor Perini

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tutor Perini are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Tutor Perini exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sterling Construction

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Construction are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Sterling Construction disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tutor Perini and Sterling Construction

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

The idea behind Tutor Perini and Sterling Construction 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.