Correlation Between Sterling Capital and Income Fund
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Income Fund 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 Income Fund 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 Income Fund Of, you can compare the effects of market volatilities on Sterling Capital and Income Fund 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 Income Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Income Fund.
Diversification Opportunities for Sterling Capital and Income Fund
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STERLING and Income is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of Sterling Capital i.e., Sterling Capital and Income Fund go up and down completely randomly.
Pair Corralation between Sterling Capital and Income Fund
Assuming the 90 days horizon Sterling Capital is expected to generate 20.16 times less return on investment than Income Fund. But when comparing it to its historical volatility, Sterling Capital Short is 5.15 times less risky than Income Fund. It trades about 0.07 of its potential returns per unit of risk. Income Fund Of is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,558 in Income Fund Of on September 2, 2024 and sell it today you would earn a total of 62.00 from holding Income Fund Of or generate 2.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Income Fund Of
Performance |
| Timeline |
| Sterling Capital Short |
| Income Fund |
Sterling Capital and Income Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Income Fund
The main advantage of trading using opposite Sterling Capital and Income Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Income Fund 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 Income Fund will offset losses from the drop in Income Fund's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
| Income Fund vs. Ultra Short Fixed Income | Income Fund vs. Siit Ultra Short | Income Fund vs. Sterling Capital Short | Income Fund vs. Federated Ultrashort Bond |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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