Correlation Between Sterling Capital and Touchstone Mid
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Touchstone Mid 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 Touchstone Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Equity and Touchstone Mid Cap, you can compare the effects of market volatilities on Sterling Capital and Touchstone Mid 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 Touchstone Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Touchstone Mid.
Diversification Opportunities for Sterling Capital and Touchstone Mid
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and Touchstone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Equity and Touchstone Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Mid Cap 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 Equity are associated (or correlated) with Touchstone Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Mid Cap has no effect on the direction of Sterling Capital i.e., Sterling Capital and Touchstone Mid go up and down completely randomly.
Pair Corralation between Sterling Capital and Touchstone Mid
Assuming the 90 days horizon Sterling Capital is expected to generate 1.42 times less return on investment than Touchstone Mid. But when comparing it to its historical volatility, Sterling Capital Equity is 1.1 times less risky than Touchstone Mid. It trades about 0.04 of its potential returns per unit of risk. Touchstone Mid Cap is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,077 in Touchstone Mid Cap on August 30, 2024 and sell it today you would earn a total of 512.00 from holding Touchstone Mid Cap or generate 24.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Equity vs. Touchstone Mid Cap
Performance |
| Timeline |
| Sterling Capital Equity |
| Touchstone Mid Cap |
Sterling Capital and Touchstone Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Touchstone Mid
The main advantage of trading using opposite Sterling Capital and Touchstone Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Touchstone Mid 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 Touchstone Mid will offset losses from the drop in Touchstone Mid's long position.| Sterling Capital vs. Sterling Capital Special | Sterling Capital vs. Sterling Capital Total | Sterling Capital vs. Sterling Capital Mid | Sterling Capital vs. Touchstone Sands Capital |
| Touchstone Mid vs. Mid Cap Growth | Touchstone Mid vs. Federated Mdt Small | Touchstone Mid vs. Causeway International Value | Touchstone Mid vs. Virtus Kar Small Cap |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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