Correlation Between Sterling Capital and Global Managed
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Global Managed 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 Global Managed 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 Global Managed Volatility, you can compare the effects of market volatilities on Sterling Capital and Global Managed 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 Global Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Global Managed.
Diversification Opportunities for Sterling Capital and Global Managed
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sterling and Global is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Global Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Managed Volatility 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 Global Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Managed Volatility has no effect on the direction of Sterling Capital i.e., Sterling Capital and Global Managed go up and down completely randomly.
Pair Corralation between Sterling Capital and Global Managed
Assuming the 90 days horizon Sterling Capital is expected to generate 3.27 times less return on investment than Global Managed. But when comparing it to its historical volatility, Sterling Capital Short is 4.55 times less risky than Global Managed. It trades about 0.13 of its potential returns per unit of risk. Global Managed Volatility is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 885.00 in Global Managed Volatility on September 1, 2024 and sell it today you would earn a total of 293.00 from holding Global Managed Volatility or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Sterling Capital Short vs. Global Managed Volatility
Performance |
| Timeline |
| Sterling Capital Short |
| Global Managed Volatility |
Sterling Capital and Global Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Global Managed
The main advantage of trading using opposite Sterling Capital and Global Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Global Managed 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 Global Managed will offset losses from the drop in Global Managed'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 |
| Global Managed vs. Precious Metals And | Global Managed vs. Great West Goldman Sachs | Global Managed vs. International Investors Gold | Global Managed vs. Gold And Precious |
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.
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