Correlation Between Sterling Capital and Locorr Long/short
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Locorr Long/short 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 Locorr Long/short 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 Locorr Longshort Modities, you can compare the effects of market volatilities on Sterling Capital and Locorr Long/short 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 Locorr Long/short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Locorr Long/short.
Diversification Opportunities for Sterling Capital and Locorr Long/short
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sterling and Locorr is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Locorr Longshort Modities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Longshort Modities 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 Locorr Long/short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Longshort Modities has no effect on the direction of Sterling Capital i.e., Sterling Capital and Locorr Long/short go up and down completely randomly.
Pair Corralation between Sterling Capital and Locorr Long/short
Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.44 times more return on investment than Locorr Long/short. However, Sterling Capital Short is 2.26 times less risky than Locorr Long/short. It trades about 0.18 of its potential returns per unit of risk. Locorr Longshort Modities is currently generating about -0.04 per unit of risk. If you would invest 781.00 in Sterling Capital Short on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Sterling Capital Short or generate 7.04% 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. Locorr Longshort Modities
Performance |
| Timeline |
| Sterling Capital Short |
| Locorr Longshort Modities |
Sterling Capital and Locorr Long/short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Locorr Long/short
The main advantage of trading using opposite Sterling Capital and Locorr Long/short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Locorr Long/short 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 Locorr Long/short will offset losses from the drop in Locorr Long/short'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 |
| Locorr Long/short vs. Calvert Short Duration | Locorr Long/short vs. Chartwell Short Duration | Locorr Long/short vs. Angel Oak Ultrashort | Locorr Long/short vs. The Short Term |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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