Correlation Between Sterling Capital and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Sterling Capital 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 Sterling Capital and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital South and Sterling Capital Mid, you can compare the effects of market volatilities on Sterling Capital 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 Sterling Capital with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Sterling Capital.
Diversification Opportunities for Sterling Capital and Sterling Capital
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and Sterling is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital South and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid 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 South 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 Mid has no effect on the direction of Sterling Capital i.e., Sterling Capital and Sterling Capital go up and down completely randomly.
Pair Corralation between Sterling Capital and Sterling Capital
Assuming the 90 days horizon Sterling Capital is expected to generate 15.36 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Sterling Capital South is 4.84 times less risky than Sterling Capital. It trades about 0.09 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,638 in Sterling Capital Mid on August 26, 2024 and sell it today you would earn a total of 99.00 from holding Sterling Capital Mid or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital South vs. Sterling Capital Mid
Performance |
| Timeline |
| Sterling Capital South |
| Sterling Capital Mid |
Sterling Capital and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Sterling Capital
The main advantage of trading using opposite Sterling Capital and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital 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.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |