Correlation Between Touchstone Sands and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Touchstone Sands 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 Touchstone Sands and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Sands Capital and Sterling Capital Equity, you can compare the effects of market volatilities on Touchstone Sands 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 Touchstone Sands with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Sands and Sterling Capital.
Diversification Opportunities for Touchstone Sands and Sterling Capital
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Touchstone and Sterling is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and Sterling Capital Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Equity and Touchstone Sands 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 Touchstone Sands Capital 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 Equity has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and Sterling Capital go up and down completely randomly.
Pair Corralation between Touchstone Sands and Sterling Capital
Assuming the 90 days horizon Touchstone Sands Capital is expected to generate 2.04 times more return on investment than Sterling Capital. However, Touchstone Sands is 2.04 times more volatile than Sterling Capital Equity. It trades about 0.1 of its potential returns per unit of risk. Sterling Capital Equity is currently generating about 0.11 per unit of risk. If you would invest 1,572 in Touchstone Sands Capital on September 1, 2024 and sell it today you would earn a total of 279.00 from holding Touchstone Sands Capital or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Sands Capital vs. Sterling Capital Equity
Performance |
| Timeline |
| Touchstone Sands Capital |
| Sterling Capital Equity |
Touchstone Sands and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Sands and Sterling Capital
The main advantage of trading using opposite Touchstone Sands and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands 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.| Touchstone Sands vs. Hotchkis Wiley Diversified | Touchstone Sands vs. Crm Mid Cap | Touchstone Sands vs. Aberdeen Select International |
| Sterling Capital vs. Sterling Capital Special | Sterling Capital vs. Sterling Capital Total | Sterling Capital vs. Touchstone Sands Capital | Sterling Capital vs. Aquagold International |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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