Correlation Between Sterling Capital and Transamerica Floating
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Transamerica Floating 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 Transamerica Floating 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 Transamerica Floating Rate, you can compare the effects of market volatilities on Sterling Capital and Transamerica Floating 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 Transamerica Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Transamerica Floating.
Diversification Opportunities for Sterling Capital and Transamerica Floating
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between STERLING and Transamerica is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Transamerica Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Floating 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 Transamerica Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Floating has no effect on the direction of Sterling Capital i.e., Sterling Capital and Transamerica Floating go up and down completely randomly.
Pair Corralation between Sterling Capital and Transamerica Floating
Assuming the 90 days horizon Sterling Capital is expected to generate 1.81 times less return on investment than Transamerica Floating. But when comparing it to its historical volatility, Sterling Capital Short is 1.21 times less risky than Transamerica Floating. It trades about 0.12 of its potential returns per unit of risk. Transamerica Floating Rate is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 778.00 in Transamerica Floating Rate on November 1, 2024 and sell it today you would earn a total of 129.00 from holding Transamerica Floating Rate or generate 16.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Transamerica Floating Rate
Performance |
| Timeline |
| Sterling Capital Short |
| Transamerica Floating |
Sterling Capital and Transamerica Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Transamerica Floating
The main advantage of trading using opposite Sterling Capital and Transamerica Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Transamerica Floating 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 Transamerica Floating will offset losses from the drop in Transamerica Floating's long position.| Sterling Capital vs. Siit Equity Factor | Sterling Capital vs. Gmo Global Equity | Sterling Capital vs. Us Vector Equity | Sterling Capital vs. T Rowe Price |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |