Correlation Between Amg River and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Amg River and Sterling Capital 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 Amg River and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amg River Road and Sterling Capital Stratton, you can compare the effects of market volatilities on Amg River and Sterling Capital 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 Amg River with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Sterling Capital.
Diversification Opportunities for Amg River and Sterling Capital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Amg and Sterling is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Amg River 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 Amg River Road are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Stratton has no effect on the direction of Amg River i.e., Amg River and Sterling Capital go up and down completely randomly.
Pair Corralation between Amg River and Sterling Capital
Assuming the 90 days horizon Amg River Road is expected to generate 1.42 times more return on investment than Sterling Capital. However, Amg River is 1.42 times more volatile than Sterling Capital Stratton. It trades about 0.42 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.25 per unit of risk. If you would invest 1,009 in Amg River Road on September 1, 2024 and sell it today you would earn a total of 112.00 from holding Amg River Road or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amg River Road vs. Sterling Capital Stratton
Performance |
| Timeline |
| Amg River Road |
| Sterling Capital Stratton |
Amg River and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amg River and Sterling Capital
The main advantage of trading using opposite Amg River and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg River position performs unexpectedly, Sterling Capital 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 Capital will offset losses from the drop in Sterling Capital's long position.| Amg River vs. Amg River Road | Amg River vs. Champlain Small Pany | Amg River vs. Amg River Road | Amg River vs. Marsico Global Fund |
| Sterling Capital vs. Realty Income | Sterling Capital vs. Dynex Capital | Sterling Capital vs. First Industrial Realty | Sterling Capital vs. Healthcare Realty Trust |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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