Correlation Between Eic Value and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Eic Value 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 Eic Value and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Sterling Capital Behavioral, you can compare the effects of market volatilities on Eic Value 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 Eic Value with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Sterling Capital.
Diversification Opportunities for Eic Value and Sterling Capital
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eic and Sterling is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund 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 Eic Value 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 Eic Value Fund 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 Eic Value i.e., Eic Value and Sterling Capital go up and down completely randomly.
Pair Corralation between Eic Value and Sterling Capital
Assuming the 90 days horizon Eic Value is expected to generate 1.6 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Eic Value Fund is 1.17 times less risky than Sterling Capital. It trades about 0.09 of its potential returns per unit of risk. Sterling Capital Behavioral is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,490 in Sterling Capital Behavioral on September 14, 2024 and sell it today you would earn a total of 593.00 from holding Sterling Capital Behavioral or generate 23.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Sterling Capital Behavioral
Performance |
| Timeline |
| Eic Value Fund |
| Sterling Capital Beh |
Eic Value and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Sterling Capital
The main advantage of trading using opposite Eic Value and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value 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.| Eic Value vs. Eic Value Fund | Eic Value vs. T Rowe Price | Eic Value vs. Davidson Multi Cap Equity | Eic Value vs. Equity Income Fund |
| Sterling Capital vs. Wasatch Small Cap | Sterling Capital vs. Pimco Diversified Income | Sterling Capital vs. Blackrock Sm Cap | Sterling Capital vs. Western Asset Diversified |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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