Correlation Between Sterling Capital and Mainstay Mackay
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Mainstay Mackay 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 Mainstay Mackay 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 Mainstay Mackay Short, you can compare the effects of market volatilities on Sterling Capital and Mainstay Mackay 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 Mainstay Mackay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Mainstay Mackay.
Diversification Opportunities for Sterling Capital and Mainstay Mackay
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and Mainstay is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Mainstay Mackay Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Short 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 Mainstay Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay Short has no effect on the direction of Sterling Capital i.e., Sterling Capital and Mainstay Mackay go up and down completely randomly.
Pair Corralation between Sterling Capital and Mainstay Mackay
Assuming the 90 days horizon Sterling Capital Short is expected to generate 1.28 times more return on investment than Mainstay Mackay. However, Sterling Capital is 1.28 times more volatile than Mainstay Mackay Short. It trades about 0.18 of its potential returns per unit of risk. Mainstay Mackay Short is currently generating about 0.19 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Mainstay Mackay Short
Performance |
| Timeline |
| Sterling Capital Short |
| Mainstay Mackay Short |
Sterling Capital and Mainstay Mackay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Mainstay Mackay
The main advantage of trading using opposite Sterling Capital and Mainstay Mackay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Mainstay Mackay 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 Mainstay Mackay will offset losses from the drop in Mainstay Mackay'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 |
| Mainstay Mackay vs. Mainstay High Yield | Mainstay Mackay vs. Mainstay Tax Free | Mainstay Mackay vs. Mainstay Income Builder | Mainstay Mackay vs. Mainstay Large Cap |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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