Correlation Between Sterling Capital and Columbia Flexible
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Columbia Flexible 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 Columbia Flexible 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 Columbia Flexible Capital, you can compare the effects of market volatilities on Sterling Capital and Columbia Flexible 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 Columbia Flexible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Columbia Flexible.
Diversification Opportunities for Sterling Capital and Columbia Flexible
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STERLING and Columbia is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Columbia Flexible Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Flexible Capital 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 Columbia Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Flexible Capital has no effect on the direction of Sterling Capital i.e., Sterling Capital and Columbia Flexible go up and down completely randomly.
Pair Corralation between Sterling Capital and Columbia Flexible
Assuming the 90 days horizon Sterling Capital is expected to generate 23.65 times less return on investment than Columbia Flexible. But when comparing it to its historical volatility, Sterling Capital Short is 4.23 times less risky than Columbia Flexible. It trades about 0.06 of its potential returns per unit of risk. Columbia Flexible Capital is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,405 in Columbia Flexible Capital on September 5, 2024 and sell it today you would earn a total of 42.00 from holding Columbia Flexible Capital or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sterling Capital Short vs. Columbia Flexible Capital
Performance |
| Timeline |
| Sterling Capital Short |
| Columbia Flexible Capital |
Sterling Capital and Columbia Flexible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Columbia Flexible
The main advantage of trading using opposite Sterling Capital and Columbia Flexible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Columbia Flexible 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 Columbia Flexible will offset losses from the drop in Columbia Flexible's long position.| Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South |
| Columbia Flexible vs. Vanguard Institutional Short Term | Columbia Flexible vs. Locorr Longshort Modities | Columbia Flexible vs. Quantitative Longshort Equity | Columbia Flexible vs. Sterling Capital Short |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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