Correlation Between Sterling Capital and Gotham Enhanced
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Gotham Enhanced 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 Gotham Enhanced 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 Gotham Enhanced Sp, you can compare the effects of market volatilities on Sterling Capital and Gotham Enhanced 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 Gotham Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Gotham Enhanced.
Diversification Opportunities for Sterling Capital and Gotham Enhanced
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sterling and Gotham is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Gotham Enhanced Sp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Enhanced Sp 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 Gotham Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Enhanced Sp has no effect on the direction of Sterling Capital i.e., Sterling Capital and Gotham Enhanced go up and down completely randomly.
Pair Corralation between Sterling Capital and Gotham Enhanced
Assuming the 90 days horizon Sterling Capital is expected to generate 42.58 times less return on investment than Gotham Enhanced. But when comparing it to its historical volatility, Sterling Capital Short is 8.17 times less risky than Gotham Enhanced. It trades about 0.06 of its potential returns per unit of risk. Gotham Enhanced Sp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,935 in Gotham Enhanced Sp on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Gotham Enhanced Sp or generate 5.17% 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. Gotham Enhanced Sp
Performance |
| Timeline |
| Sterling Capital Short |
| Gotham Enhanced Sp |
Sterling Capital and Gotham Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Gotham Enhanced
The main advantage of trading using opposite Sterling Capital and Gotham Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Gotham Enhanced 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 Gotham Enhanced will offset losses from the drop in Gotham Enhanced's long position.| Sterling Capital vs. Cref Money Market | Sterling Capital vs. Ashmore Emerging Markets | Sterling Capital vs. Dws Government Money | Sterling Capital vs. Dreyfus Institutional Reserves |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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