Correlation Between Sterling Capital and Dreyfus High
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Dreyfus High 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 Dreyfus High 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 Dreyfus High Yield, you can compare the effects of market volatilities on Sterling Capital and Dreyfus High 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 Dreyfus High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Dreyfus High.
Diversification Opportunities for Sterling Capital and Dreyfus High
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and Dreyfus is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Dreyfus High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus High Yield 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 Dreyfus High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus High Yield has no effect on the direction of Sterling Capital i.e., Sterling Capital and Dreyfus High go up and down completely randomly.
Pair Corralation between Sterling Capital and Dreyfus High
Assuming the 90 days horizon Sterling Capital is expected to generate 13.84 times less return on investment than Dreyfus High. But when comparing it to its historical volatility, Sterling Capital Short is 5.12 times less risky than Dreyfus High. It trades about 0.06 of its potential returns per unit of risk. Dreyfus High Yield is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,100 in Dreyfus High Yield on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Dreyfus High Yield or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sterling Capital Short vs. Dreyfus High Yield
Performance |
| Timeline |
| Sterling Capital Short |
| Dreyfus High Yield |
Sterling Capital and Dreyfus High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Dreyfus High
The main advantage of trading using opposite Sterling Capital and Dreyfus High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Dreyfus High 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 Dreyfus High will offset losses from the drop in Dreyfus High's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
| Dreyfus High vs. Queens Road Small | Dreyfus High vs. Heartland Value Plus | Dreyfus High vs. Lord Abbett Small | Dreyfus High vs. Vanguard Small Cap Value |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |