Correlation Between Sterling Capital and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Federated 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 Federated 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 Federated Strategic Value, you can compare the effects of market volatilities on Sterling Capital and Federated 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Federated Strategic.
Diversification Opportunities for Sterling Capital and Federated Strategic
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and Federated is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Sterling Capital i.e., Sterling Capital and Federated Strategic go up and down completely randomly.
Pair Corralation between Sterling Capital and Federated Strategic
Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.2 times more return on investment than Federated Strategic. However, Sterling Capital Short is 5.04 times less risky than Federated Strategic. It trades about 0.08 of its potential returns per unit of risk. Federated Strategic Value is currently generating about -0.02 per unit of risk. If you would invest 832.00 in Sterling Capital Short on September 12, 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Federated Strategic Value
Performance |
| Timeline |
| Sterling Capital Short |
| Federated Strategic Value |
Sterling Capital and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Federated Strategic
The main advantage of trading using opposite Sterling Capital and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Federated 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 Federated Strategic will offset losses from the drop in Federated Strategic'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 |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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