Correlation Between Sterling Capital and International Investors
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and International Investors 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 International Investors 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 International Investors Gold, you can compare the effects of market volatilities on Sterling Capital and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and International Investors.
Diversification Opportunities for Sterling Capital and International Investors
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between STERLING and International is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Sterling Capital i.e., Sterling Capital and International Investors go up and down completely randomly.
Pair Corralation between Sterling Capital and International Investors
Assuming the 90 days horizon Sterling Capital is expected to generate 23.38 times less return on investment than International Investors. But when comparing it to its historical volatility, Sterling Capital Short is 15.61 times less risky than International Investors. It trades about 0.05 of its potential returns per unit of risk. International Investors Gold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 912.00 in International Investors Gold on September 4, 2024 and sell it today you would earn a total of 73.00 from holding International Investors Gold or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sterling Capital Short vs. International Investors Gold
Performance |
| Timeline |
| Sterling Capital Short |
| International Investors |
Sterling Capital and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and International Investors
The main advantage of trading using opposite Sterling Capital and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' 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 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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