Correlation Between Sterling Capital and Jhancock Diversified
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Jhancock Diversified 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 Jhancock Diversified 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 Jhancock Diversified Macro, you can compare the effects of market volatilities on Sterling Capital and Jhancock Diversified 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 Jhancock Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Jhancock Diversified.
Diversification Opportunities for Sterling Capital and Jhancock Diversified
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STERLING and Jhancock is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Jhancock Diversified Macro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Diversified 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 Jhancock Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Diversified has no effect on the direction of Sterling Capital i.e., Sterling Capital and Jhancock Diversified go up and down completely randomly.
Pair Corralation between Sterling Capital and Jhancock Diversified
Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.26 times more return on investment than Jhancock Diversified. However, Sterling Capital Short is 3.8 times less risky than Jhancock Diversified. It trades about 0.14 of its potential returns per unit of risk. Jhancock Diversified Macro is currently generating about 0.0 per unit of risk. If you would invest 755.00 in Sterling Capital Short on September 3, 2024 and sell it today you would earn a total of 81.00 from holding Sterling Capital Short or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Jhancock Diversified Macro
Performance |
| Timeline |
| Sterling Capital Short |
| Jhancock Diversified |
Sterling Capital and Jhancock Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Jhancock Diversified
The main advantage of trading using opposite Sterling Capital and Jhancock Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Jhancock Diversified 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 Jhancock Diversified will offset losses from the drop in Jhancock Diversified's long position.| Sterling Capital vs. SPACE | Sterling Capital vs. Bayview Acquisition Corp | Sterling Capital vs. Ampleforth | Sterling Capital vs. ionet |
| Jhancock Diversified vs. Goldman Sachs Short | Jhancock Diversified vs. Angel Oak Ultrashort | Jhancock Diversified vs. Siit Ultra Short | Jhancock Diversified 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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