Correlation Between Boston Partners and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Boston Partners and Sterling Capital 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 Boston Partners and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Partners Longshort and Sterling Capital Short, you can compare the effects of market volatilities on Boston Partners and Sterling Capital 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 Boston Partners with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Partners and Sterling Capital.
Diversification Opportunities for Boston Partners and Sterling Capital
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and Sterling is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Boston Partners Longshort and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Boston Partners 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 Boston Partners Longshort are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Short has no effect on the direction of Boston Partners i.e., Boston Partners and Sterling Capital go up and down completely randomly.
Pair Corralation between Boston Partners and Sterling Capital
Assuming the 90 days horizon Boston Partners is expected to generate 1.43 times less return on investment than Sterling Capital. In addition to that, Boston Partners is 4.66 times more volatile than Sterling Capital Short. It trades about 0.01 of its total potential returns per unit of risk. Sterling Capital Short is currently generating about 0.06 per unit of volatility. If you would invest 835.00 in Sterling Capital Short on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Sterling Capital Short or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Partners Longshort vs. Sterling Capital Short
Performance |
| Timeline |
| Boston Partners Longshort |
| Sterling Capital Short |
Boston Partners and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Partners and Sterling Capital
The main advantage of trading using opposite Boston Partners and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Partners position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Boston Partners vs. Aqr Managed Futures | Boston Partners vs. Neuberger Berman Long | Boston Partners vs. Asg Managed Futures | Boston Partners vs. Marketfield Fund Marketfield |
| Sterling Capital vs. Mesirow Financial Small | Sterling Capital vs. Davis Financial Fund | Sterling Capital vs. Fidelity Advisor Financial | Sterling Capital vs. Financials Ultrasector Profund |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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