Correlation Between Sterling Capital and 70082LAB3
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By analyzing existing cross correlation between Sterling Capital Special and US70082LAB36, you can compare the effects of market volatilities on Sterling Capital and 70082LAB3 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 70082LAB3. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and 70082LAB3.
Diversification Opportunities for Sterling Capital and 70082LAB3
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and 70082LAB3 is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and US70082LAB36 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US70082LAB36 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 Special are associated (or correlated) with 70082LAB3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US70082LAB36 has no effect on the direction of Sterling Capital i.e., Sterling Capital and 70082LAB3 go up and down completely randomly.
Pair Corralation between Sterling Capital and 70082LAB3
Assuming the 90 days horizon Sterling Capital Special is expected to generate 0.54 times more return on investment than 70082LAB3. However, Sterling Capital Special is 1.84 times less risky than 70082LAB3. It trades about 0.34 of its potential returns per unit of risk. US70082LAB36 is currently generating about -0.22 per unit of risk. If you would invest 3,077 in Sterling Capital Special on September 1, 2024 and sell it today you would earn a total of 208.00 from holding Sterling Capital Special or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 50.0% |
| Values | Daily Returns |
Sterling Capital Special vs. US70082LAB36
Performance |
| Timeline |
| Sterling Capital Special |
| US70082LAB36 |
Sterling Capital and 70082LAB3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and 70082LAB3
The main advantage of trading using opposite Sterling Capital and 70082LAB3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, 70082LAB3 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 70082LAB3 will offset losses from the drop in 70082LAB3's long position.| Sterling Capital vs. Angel Oak Financial | Sterling Capital vs. Blackrock Financial Institutions | Sterling Capital vs. Mesirow Financial Small | Sterling Capital vs. Transamerica Financial Life |
| 70082LAB3 vs. The9 Ltd ADR | 70082LAB3 vs. NetEase | 70082LAB3 vs. Aegon NV ADR | 70082LAB3 vs. Employers Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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