Correlation Between Sterling Capital and Limited Term
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Limited Term 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 Limited Term 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 Limited Term Tax, you can compare the effects of market volatilities on Sterling Capital and Limited Term 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 Limited Term. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Limited Term.
Diversification Opportunities for Sterling Capital and Limited Term
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STERLING and LIMITED is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Limited Term Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limited Term Tax 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 Limited Term. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limited Term Tax has no effect on the direction of Sterling Capital i.e., Sterling Capital and Limited Term go up and down completely randomly.
Pair Corralation between Sterling Capital and Limited Term
Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.77 times more return on investment than Limited Term. However, Sterling Capital Short is 1.29 times less risky than Limited Term. It trades about 0.08 of its potential returns per unit of risk. Limited Term Tax is currently generating about 0.04 per unit of risk. If you would invest 831.00 in Sterling Capital Short on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Sterling Capital Short or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Limited Term Tax
Performance |
| Timeline |
| Sterling Capital Short |
| Limited Term Tax |
Sterling Capital and Limited Term Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Limited Term
The main advantage of trading using opposite Sterling Capital and Limited Term positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Limited Term 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 Limited Term will offset losses from the drop in Limited Term's long position.| Sterling Capital vs. SPACE | Sterling Capital vs. Bayview Acquisition Corp | Sterling Capital vs. Ampleforth | Sterling Capital vs. ionet |
| Limited Term vs. Tax Exempt Bond | Limited Term vs. American High Income Municipal | Limited Term vs. Us Government Securities | Limited Term vs. HUMANA INC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |