Correlation Between Sterling Capital and Cambiar Smid
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Cambiar Smid 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 Cambiar Smid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Short and Cambiar Smid Fund, you can compare the effects of market volatilities on Sterling Capital and Cambiar Smid 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 Cambiar Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Cambiar Smid.
Diversification Opportunities for Sterling Capital and Cambiar Smid
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between STERLING and CAMBIAR is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Cambiar Smid Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Smid 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 Short are associated (or correlated) with Cambiar Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Smid has no effect on the direction of Sterling Capital i.e., Sterling Capital and Cambiar Smid go up and down completely randomly.
Pair Corralation between Sterling Capital and Cambiar Smid
Assuming the 90 days horizon Sterling Capital is expected to generate 2.13 times less return on investment than Cambiar Smid. But when comparing it to its historical volatility, Sterling Capital Short is 5.58 times less risky than Cambiar Smid. It trades about 0.14 of its potential returns per unit of risk. Cambiar Smid Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,127 in Cambiar Smid Fund on August 30, 2024 and sell it today you would earn a total of 460.00 from holding Cambiar Smid Fund or generate 21.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Cambiar Smid Fund
Performance |
| Timeline |
| Sterling Capital Short |
| Cambiar Smid |
Sterling Capital and Cambiar Smid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Cambiar Smid
The main advantage of trading using opposite Sterling Capital and Cambiar Smid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Cambiar Smid 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 Cambiar Smid will offset losses from the drop in Cambiar Smid's long position.| Sterling Capital vs. Permanent Portfolio Class | Sterling Capital vs. HUMANA INC | Sterling Capital vs. Aquagold International | Sterling Capital vs. Barloworld Ltd ADR |
| Cambiar Smid vs. Nebraska Municipal Fund | Cambiar Smid vs. Astor Longshort Fund | Cambiar Smid vs. Sterling Capital Short | Cambiar Smid vs. Blrc Sgy Mnp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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