Correlation Between Sterling Capital and Massachusetts Investors
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Massachusetts Investors 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 Massachusetts Investors 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 Massachusetts Investors Growth, you can compare the effects of market volatilities on Sterling Capital and Massachusetts Investors 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 Massachusetts Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Massachusetts Investors.
Diversification Opportunities for Sterling Capital and Massachusetts Investors
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between STERLING and Massachusetts is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Massachusetts Investors Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Investors 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 Massachusetts Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Investors has no effect on the direction of Sterling Capital i.e., Sterling Capital and Massachusetts Investors go up and down completely randomly.
Pair Corralation between Sterling Capital and Massachusetts Investors
Assuming the 90 days horizon Sterling Capital is expected to generate 6.41 times less return on investment than Massachusetts Investors. But when comparing it to its historical volatility, Sterling Capital Short is 8.23 times less risky than Massachusetts Investors. It trades about 0.11 of its potential returns per unit of risk. Massachusetts Investors Growth is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,829 in Massachusetts Investors Growth on August 29, 2024 and sell it today you would earn a total of 72.00 from holding Massachusetts Investors Growth or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Massachusetts Investors Growth
Performance |
| Timeline |
| Sterling Capital Short |
| Massachusetts Investors |
Sterling Capital and Massachusetts Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Massachusetts Investors
The main advantage of trading using opposite Sterling Capital and Massachusetts Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Massachusetts Investors 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 Massachusetts Investors will offset losses from the drop in Massachusetts Investors' long position.| Sterling Capital vs. Permanent Portfolio Class | Sterling Capital vs. HUMANA INC | Sterling Capital vs. Aquagold International | Sterling Capital vs. Barloworld Ltd ADR |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |