Correlation Between Sterling Capital and Federated Ultrashort
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Federated Ultrashort 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 Federated Ultrashort 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 Federated Ultrashort Bond, you can compare the effects of market volatilities on Sterling Capital and Federated Ultrashort 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 Federated Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Federated Ultrashort.
Diversification Opportunities for Sterling Capital and Federated Ultrashort
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between STERLING and FEDERATED is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Federated Ultrashort Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ultrashort 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 Federated Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ultrashort Bond has no effect on the direction of Sterling Capital i.e., Sterling Capital and Federated Ultrashort go up and down completely randomly.
Pair Corralation between Sterling Capital and Federated Ultrashort
Assuming the 90 days horizon Sterling Capital is expected to generate 1.29 times less return on investment than Federated Ultrashort. In addition to that, Sterling Capital is 1.43 times more volatile than Federated Ultrashort Bond. It trades about 0.13 of its total potential returns per unit of risk. Federated Ultrashort Bond is currently generating about 0.23 per unit of volatility. If you would invest 829.00 in Federated Ultrashort Bond on September 2, 2024 and sell it today you would earn a total of 99.00 from holding Federated Ultrashort Bond or generate 11.94% 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. Federated Ultrashort Bond
Performance |
| Timeline |
| Sterling Capital Short |
| Federated Ultrashort Bond |
Sterling Capital and Federated Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Federated Ultrashort
The main advantage of trading using opposite Sterling Capital and Federated Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Federated Ultrashort 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 Federated Ultrashort will offset losses from the drop in Federated Ultrashort'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 |
| Federated Ultrashort vs. Rationalpier 88 Convertible | Federated Ultrashort vs. Ab Bond Inflation | Federated Ultrashort vs. Ms Global Fixed | Federated Ultrashort vs. Calamos Dynamic Convertible |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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