Correlation Between Sterling Capital and Touchstone Ultra
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Touchstone Ultra 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 Touchstone Ultra 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 Touchstone Ultra Short, you can compare the effects of market volatilities on Sterling Capital and Touchstone Ultra 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 Touchstone Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Touchstone Ultra.
Diversification Opportunities for Sterling Capital and Touchstone Ultra
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between STERLING and Touchstone is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Touchstone Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Ultra Short 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 Touchstone Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Ultra Short has no effect on the direction of Sterling Capital i.e., Sterling Capital and Touchstone Ultra go up and down completely randomly.
Pair Corralation between Sterling Capital and Touchstone Ultra
Assuming the 90 days horizon Sterling Capital is expected to generate 1.43 times less return on investment than Touchstone Ultra. But when comparing it to its historical volatility, Sterling Capital Short is 1.12 times less risky than Touchstone Ultra. It trades about 0.14 of its potential returns per unit of risk. Touchstone Ultra Short is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 912.00 in Touchstone Ultra Short on October 26, 2024 and sell it today you would earn a total of 11.00 from holding Touchstone Ultra Short or generate 1.21% 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. Touchstone Ultra Short
Performance |
| Timeline |
| Sterling Capital Short |
| Touchstone Ultra Short |
Sterling Capital and Touchstone Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Touchstone Ultra
The main advantage of trading using opposite Sterling Capital and Touchstone Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Touchstone Ultra 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 Touchstone Ultra will offset losses from the drop in Touchstone Ultra's long position.| Sterling Capital vs. International Investors Gold | Sterling Capital vs. The Gold Bullion | Sterling Capital vs. Goldman Sachs Strategic | Sterling Capital vs. Invesco Gold Special |
| Touchstone Ultra vs. Black Oak Emerging | Touchstone Ultra vs. Eagle Mlp Strategy | Touchstone Ultra vs. Morgan Stanley Emerging | Touchstone Ultra vs. Pimco Moditiesplus Strategy |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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