Correlation Between Barings Global and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Barings Global 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 Global 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 Global Floating and Sterling Capital Total, you can compare the effects of market volatilities on Barings Global 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 Global with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Sterling Capital.
Diversification Opportunities for Barings Global and Sterling Capital
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barings and Sterling is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Sterling Capital Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Total and Barings Global 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 Global Floating 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 Total has no effect on the direction of Barings Global i.e., Barings Global and Sterling Capital go up and down completely randomly.
Pair Corralation between Barings Global and Sterling Capital
Assuming the 90 days horizon Barings Global Floating is expected to generate 0.41 times more return on investment than Sterling Capital. However, Barings Global Floating is 2.41 times less risky than Sterling Capital. It trades about 0.29 of its potential returns per unit of risk. Sterling Capital Total is currently generating about -0.07 per unit of risk. If you would invest 871.00 in Barings Global Floating on August 26, 2024 and sell it today you would earn a total of 6.00 from holding Barings Global Floating or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Sterling Capital Total
Performance |
| Timeline |
| Barings Global Floating |
| Sterling Capital Total |
Barings Global and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Sterling Capital
The main advantage of trading using opposite Barings Global and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global 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 Global vs. Barings Active Short | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Emerging Markets | Barings Global vs. Barings Active Short |
| Sterling Capital vs. The Hartford Global | Sterling Capital vs. Barings Global Floating | Sterling Capital vs. Scharf Global Opportunity | Sterling Capital vs. T Rowe Price |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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