Correlation Between Sterling Capital and Inflation-adjusted
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Inflation-adjusted 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 Inflation-adjusted into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Short and Inflation Adjusted Bond Fund, you can compare the effects of market volatilities on Sterling Capital and Inflation-adjusted 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 Inflation-adjusted. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Inflation-adjusted.
Diversification Opportunities for Sterling Capital and Inflation-adjusted
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sterling and Inflation-adjusted is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Inflation Adjusted Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Adjusted Bond 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 Short are associated (or correlated) with Inflation-adjusted. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Adjusted Bond has no effect on the direction of Sterling Capital i.e., Sterling Capital and Inflation-adjusted go up and down completely randomly.
Pair Corralation between Sterling Capital and Inflation-adjusted
Assuming the 90 days horizon Sterling Capital is expected to generate 3.01 times less return on investment than Inflation-adjusted. But when comparing it to its historical volatility, Sterling Capital Short is 2.27 times less risky than Inflation-adjusted. It trades about 0.21 of its potential returns per unit of risk. Inflation Adjusted Bond Fund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,030 in Inflation Adjusted Bond Fund on November 7, 2024 and sell it today you would earn a total of 15.00 from holding Inflation Adjusted Bond Fund or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Inflation Adjusted Bond Fund
Performance |
| Timeline |
| Sterling Capital Short |
| Inflation Adjusted Bond |
Sterling Capital and Inflation-adjusted Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Inflation-adjusted
The main advantage of trading using opposite Sterling Capital and Inflation-adjusted positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Inflation-adjusted 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 Inflation-adjusted will offset losses from the drop in Inflation-adjusted's long position.| Sterling Capital vs. Financials Ultrasector Profund | Sterling Capital vs. Voya Government Money | Sterling Capital vs. Schwab Government Money | Sterling Capital vs. Blackstone Secured Lending |
| Inflation-adjusted vs. Federated Government Income | Inflation-adjusted vs. Inverse Government Long | Inflation-adjusted vs. Dunham Porategovernment Bond | Inflation-adjusted vs. Us Government Securities |
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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