Correlation Between Sterling Capital and Dreyfus Strategic
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Dreyfus Strategic 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 Dreyfus Strategic 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 Dreyfus Strategic Value, you can compare the effects of market volatilities on Sterling Capital and Dreyfus Strategic 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 Dreyfus Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Dreyfus Strategic.
Diversification Opportunities for Sterling Capital and Dreyfus Strategic
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between STERLING and Dreyfus is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Dreyfus Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Strategic Value 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 Dreyfus Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Strategic Value has no effect on the direction of Sterling Capital i.e., Sterling Capital and Dreyfus Strategic go up and down completely randomly.
Pair Corralation between Sterling Capital and Dreyfus Strategic
Assuming the 90 days horizon Sterling Capital is expected to generate 52.8 times less return on investment than Dreyfus Strategic. But when comparing it to its historical volatility, Sterling Capital Short is 9.88 times less risky than Dreyfus Strategic. It trades about 0.06 of its potential returns per unit of risk. Dreyfus Strategic Value is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 4,833 in Dreyfus Strategic Value on September 3, 2024 and sell it today you would earn a total of 311.00 from holding Dreyfus Strategic Value or generate 6.43% 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. Dreyfus Strategic Value
Performance |
| Timeline |
| Sterling Capital Short |
| Dreyfus Strategic Value |
Sterling Capital and Dreyfus Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Dreyfus Strategic
The main advantage of trading using opposite Sterling Capital and Dreyfus Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Dreyfus Strategic 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 Dreyfus Strategic will offset losses from the drop in Dreyfus Strategic's long position.| Sterling Capital vs. SPACE | Sterling Capital vs. Bayview Acquisition Corp | Sterling Capital vs. Ampleforth | Sterling Capital vs. ionet |
| Dreyfus Strategic vs. Sterling Capital Short | Dreyfus Strategic vs. Rbc Short Duration | Dreyfus Strategic vs. Angel Oak Ultrashort | Dreyfus Strategic vs. Vanguard Institutional Short Term |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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