Correlation Between Sterling Capital and Virtus Convertible
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Virtus Convertible 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 Virtus Convertible 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 Virtus Convertible, you can compare the effects of market volatilities on Sterling Capital and Virtus Convertible 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 Virtus Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Virtus Convertible.
Diversification Opportunities for Sterling Capital and Virtus Convertible
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between STERLING and Virtus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Virtus Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Convertible 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 Virtus Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Convertible has no effect on the direction of Sterling Capital i.e., Sterling Capital and Virtus Convertible go up and down completely randomly.
Pair Corralation between Sterling Capital and Virtus Convertible
Assuming the 90 days horizon Sterling Capital is expected to generate 4.94 times less return on investment than Virtus Convertible. But when comparing it to its historical volatility, Sterling Capital Short is 4.68 times less risky than Virtus Convertible. It trades about 0.18 of its potential returns per unit of risk. Virtus Convertible is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,229 in Virtus Convertible on September 3, 2024 and sell it today you would earn a total of 493.00 from holding Virtus Convertible or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Virtus Convertible
Performance |
| Timeline |
| Sterling Capital Short |
| Virtus Convertible |
Sterling Capital and Virtus Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Virtus Convertible
The main advantage of trading using opposite Sterling Capital and Virtus Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Virtus Convertible 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 Virtus Convertible will offset losses from the drop in Virtus Convertible's long position.| Sterling Capital vs. SPACE | Sterling Capital vs. Bayview Acquisition Corp | Sterling Capital vs. Ampleforth | Sterling Capital vs. ionet |
| Virtus Convertible vs. Franklin Vertible Securities | Virtus Convertible vs. Franklin Vertible Securities | Virtus Convertible vs. Allianzgi Vertible Fund |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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