Correlation Between Barings Emerging and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Barings Emerging and Sterling Capital 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 Barings Emerging and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Emerging Markets and Sterling Capital Behavioral, you can compare the effects of market volatilities on Barings Emerging and Sterling Capital 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 Barings Emerging with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Emerging and Sterling Capital.
Diversification Opportunities for Barings Emerging and Sterling Capital
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barings and Sterling is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Barings Emerging Markets and Sterling Capital Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Beh and Barings Emerging 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 Barings Emerging Markets are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Beh has no effect on the direction of Barings Emerging i.e., Barings Emerging and Sterling Capital go up and down completely randomly.
Pair Corralation between Barings Emerging and Sterling Capital
Assuming the 90 days horizon Barings Emerging is expected to generate 1.5 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Barings Emerging Markets is 2.01 times less risky than Sterling Capital. It trades about 0.08 of its potential returns per unit of risk. Sterling Capital Behavioral is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 886.00 in Sterling Capital Behavioral on September 12, 2024 and sell it today you would earn a total of 139.00 from holding Sterling Capital Behavioral or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Emerging Markets vs. Sterling Capital Behavioral
Performance |
| Timeline |
| Barings Emerging Markets |
| Sterling Capital Beh |
Barings Emerging and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Emerging and Sterling Capital
The main advantage of trading using opposite Barings Emerging and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Emerging position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. Fidelity New Markets | Barings Emerging vs. SCOR PK |
| Sterling Capital vs. Barings Emerging Markets | Sterling Capital vs. Siit Emerging Markets | Sterling Capital vs. Nasdaq 100 2x Strategy | Sterling Capital vs. Shelton Emerging Markets |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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