Correlation Between Sterling Capital and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Bond Fund 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 Bond Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Total and Bond Fund Of, you can compare the effects of market volatilities on Sterling Capital and Bond Fund 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 Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Bond Fund.
Diversification Opportunities for Sterling Capital and Bond Fund
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Sterling and Bond is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Total and Bond Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund 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 Total are associated (or correlated) with Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Sterling Capital i.e., Sterling Capital and Bond Fund go up and down completely randomly.
Pair Corralation between Sterling Capital and Bond Fund
Assuming the 90 days horizon Sterling Capital Total is expected to generate 1.02 times more return on investment than Bond Fund. However, Sterling Capital is 1.02 times more volatile than Bond Fund Of. It trades about 0.08 of its potential returns per unit of risk. Bond Fund Of is currently generating about 0.08 per unit of risk. If you would invest 906.00 in Sterling Capital Total on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Sterling Capital Total or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sterling Capital Total vs. Bond Fund Of
Performance |
| Timeline |
| Sterling Capital Total |
| Bond Fund |
Sterling Capital and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Bond Fund
The main advantage of trading using opposite Sterling Capital and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
| Bond Fund vs. American High Income | Bond Fund vs. Europacific Growth Fund | Bond Fund vs. Capital World Bond | Bond Fund vs. Growth Fund Of |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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