Correlation Between Falcon Focus and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Falcon Focus 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 Falcon Focus and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Focus Scv and Sterling Capital Intermediate, you can compare the effects of market volatilities on Falcon Focus 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 Falcon Focus with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Focus and Sterling Capital.
Diversification Opportunities for Falcon Focus and Sterling Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Falcon and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Focus Scv and Sterling Capital Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Int and Falcon Focus 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 Falcon Focus Scv 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 Int has no effect on the direction of Falcon Focus i.e., Falcon Focus and Sterling Capital go up and down completely randomly.
Pair Corralation between Falcon Focus and Sterling Capital
Assuming the 90 days horizon Falcon Focus Scv is expected to generate 2.65 times more return on investment than Sterling Capital. However, Falcon Focus is 2.65 times more volatile than Sterling Capital Intermediate. It trades about 0.06 of its potential returns per unit of risk. Sterling Capital Intermediate is currently generating about 0.11 per unit of risk. If you would invest 1,250 in Falcon Focus Scv on September 1, 2024 and sell it today you would earn a total of 65.00 from holding Falcon Focus Scv or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Falcon Focus Scv vs. Sterling Capital Intermediate
Performance |
| Timeline |
| Falcon Focus Scv |
| Sterling Capital Int |
Falcon Focus and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Focus and Sterling Capital
The main advantage of trading using opposite Falcon Focus and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Focus 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.| Falcon Focus vs. Saat Moderate Strategy | Falcon Focus vs. Multimanager Lifestyle Moderate | Falcon Focus vs. Moderately Aggressive Balanced | Falcon Focus vs. Target Retirement 2040 |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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