Correlation Between Sterling Capital and Us Government
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Us Government 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 Sterling Capital and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital North and Us Government Securities, you can compare the effects of market volatilities on Sterling Capital and Us Government 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 Capital with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Us Government.
Diversification Opportunities for Sterling Capital and Us Government
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and RGVJX is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital North and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Sterling Capital 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 Capital North are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Sterling Capital i.e., Sterling Capital and Us Government go up and down completely randomly.
Pair Corralation between Sterling Capital and Us Government
Assuming the 90 days horizon Sterling Capital North is expected to generate 0.66 times more return on investment than Us Government. However, Sterling Capital North is 1.52 times less risky than Us Government. It trades about 0.21 of its potential returns per unit of risk. Us Government Securities is currently generating about 0.11 per unit of risk. If you would invest 1,005 in Sterling Capital North on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Sterling Capital North or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital North vs. Us Government Securities
Performance |
| Timeline |
| Sterling Capital North |
| Us Government Securities |
Sterling Capital and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Us Government
The main advantage of trading using opposite Sterling Capital and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Sterling Capital vs. Us Government Securities | Sterling Capital vs. Aig Government Money | Sterling Capital vs. Inverse Government Long | Sterling Capital vs. Franklin Adjustable Government |
| Us Government vs. Barings Global Floating | Us Government vs. Wasatch Global Opportunities | Us Government vs. Dreyfusstandish Global Fixed | Us Government vs. Blue Current Global |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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