Correlation Between Sterling Capital and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Eaton Vance 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 Eaton Vance 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 Eaton Vance Global, you can compare the effects of market volatilities on Sterling Capital and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Eaton Vance.
Diversification Opportunities for Sterling Capital and Eaton Vance
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sterling and Eaton is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Eaton Vance Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Global 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Global has no effect on the direction of Sterling Capital i.e., Sterling Capital and Eaton Vance go up and down completely randomly.
Pair Corralation between Sterling Capital and Eaton Vance
Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.71 times more return on investment than Eaton Vance. However, Sterling Capital Short is 1.4 times less risky than Eaton Vance. It trades about 0.06 of its potential returns per unit of risk. Eaton Vance Global is currently generating about 0.04 per unit of risk. If you would invest 835.00 in Sterling Capital Short on September 1, 2024 and sell it today you would earn a total of 1.00 from holding Sterling Capital Short or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sterling Capital Short vs. Eaton Vance Global
Performance |
| Timeline |
| Sterling Capital Short |
| Eaton Vance Global |
Sterling Capital and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Eaton Vance
The main advantage of trading using opposite Sterling Capital and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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