Correlation Between Sterling Capital and SPACE
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and SPACE 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 SPACE 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 SPACE, you can compare the effects of market volatilities on Sterling Capital and SPACE 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 SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and SPACE.
Diversification Opportunities for Sterling Capital and SPACE
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and SPACE is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Sterling Capital i.e., Sterling Capital and SPACE go up and down completely randomly.
Pair Corralation between Sterling Capital and SPACE
Assuming the 90 days horizon Sterling Capital is expected to generate 75.08 times less return on investment than SPACE. But when comparing it to its historical volatility, Sterling Capital Short is 47.02 times less risky than SPACE. It trades about 0.08 of its potential returns per unit of risk. SPACE is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 35.00 in SPACE on September 12, 2024 and sell it today you would earn a total of 15.00 from holding SPACE or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sterling Capital Short vs. SPACE
Performance |
| Timeline |
| Sterling Capital Short |
| SPACE |
Sterling Capital and SPACE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and SPACE
The main advantage of trading using opposite Sterling Capital and SPACE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, SPACE 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 SPACE will offset losses from the drop in SPACE's long position.| Sterling Capital vs. Goldman Sachs Real | Sterling Capital vs. Guggenheim Risk Managed | Sterling Capital vs. Redwood Real Estate | Sterling Capital vs. Sa Real Estate |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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