Correlation Between Sterling Capital and Oklahoma Municipal
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Oklahoma Municipal 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 Oklahoma Municipal 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 Oklahoma Municipal Fund, you can compare the effects of market volatilities on Sterling Capital and Oklahoma Municipal 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 Oklahoma Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Oklahoma Municipal.
Diversification Opportunities for Sterling Capital and Oklahoma Municipal
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and Oklahoma is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Oklahoma Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oklahoma Municipal 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 Oklahoma Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oklahoma Municipal has no effect on the direction of Sterling Capital i.e., Sterling Capital and Oklahoma Municipal go up and down completely randomly.
Pair Corralation between Sterling Capital and Oklahoma Municipal
Assuming the 90 days horizon Sterling Capital is expected to generate 11.12 times less return on investment than Oklahoma Municipal. But when comparing it to its historical volatility, Sterling Capital Short is 3.86 times less risky than Oklahoma Municipal. It trades about 0.07 of its potential returns per unit of risk. Oklahoma Municipal Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,052 in Oklahoma Municipal Fund on September 3, 2024 and sell it today you would earn a total of 14.00 from holding Oklahoma Municipal Fund or generate 1.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Oklahoma Municipal Fund
Performance |
| Timeline |
| Sterling Capital Short |
| Oklahoma Municipal |
Sterling Capital and Oklahoma Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Oklahoma Municipal
The main advantage of trading using opposite Sterling Capital and Oklahoma Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Oklahoma Municipal 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 Oklahoma Municipal will offset losses from the drop in Oklahoma Municipal's long position.| Sterling Capital vs. Europac Gold Fund | Sterling Capital vs. Oppenheimer Gold Special | Sterling Capital vs. Franklin Gold Precious | Sterling Capital vs. Goldman Sachs Short |
| Oklahoma Municipal vs. Limited Term Tax | Oklahoma Municipal vs. Calvert Short Duration | Oklahoma Municipal vs. Federated Short Term Income | Oklahoma Municipal vs. Jhancock Short Duration |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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