Correlation Between Sterling Capital and Rbc Bluebay
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Rbc Bluebay 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 Rbc Bluebay 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 Rbc Bluebay Global, you can compare the effects of market volatilities on Sterling Capital and Rbc Bluebay 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 Rbc Bluebay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Rbc Bluebay.
Diversification Opportunities for Sterling Capital and Rbc Bluebay
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and Rbc is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Rbc Bluebay Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rbc Bluebay Global 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 Rbc Bluebay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rbc Bluebay Global has no effect on the direction of Sterling Capital i.e., Sterling Capital and Rbc Bluebay go up and down completely randomly.
Pair Corralation between Sterling Capital and Rbc Bluebay
Assuming the 90 days horizon Sterling Capital is expected to generate 1.89 times less return on investment than Rbc Bluebay. But when comparing it to its historical volatility, Sterling Capital Short is 1.43 times less risky than Rbc Bluebay. It trades about 0.18 of its potential returns per unit of risk. Rbc Bluebay Global is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 876.00 in Rbc Bluebay Global on September 1, 2024 and sell it today you would earn a total of 121.00 from holding Rbc Bluebay Global or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Sterling Capital Short vs. Rbc Bluebay Global
Performance |
| Timeline |
| Sterling Capital Short |
| Rbc Bluebay Global |
Sterling Capital and Rbc Bluebay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Rbc Bluebay
The main advantage of trading using opposite Sterling Capital and Rbc Bluebay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Rbc Bluebay 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 Rbc Bluebay will offset losses from the drop in Rbc Bluebay'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 |
| Rbc Bluebay vs. Jpmorgan Income Fund | Rbc Bluebay vs. Prudential High Yield | Rbc Bluebay vs. Parametric Modity Strategy | Rbc Bluebay vs. Prudential Floating Rate |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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