Correlation Between Federated Ultrashort and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Federated Ultrashort 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 Federated Ultrashort and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ultrashort Bond and Sterling Capital Stratton, you can compare the effects of market volatilities on Federated Ultrashort 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 Federated Ultrashort with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ultrashort and Sterling Capital.
Diversification Opportunities for Federated Ultrashort and Sterling Capital
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FEDERATED and STERLING is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ultrashort Bond and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Federated Ultrashort 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 Federated Ultrashort Bond 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 Stratton has no effect on the direction of Federated Ultrashort i.e., Federated Ultrashort and Sterling Capital go up and down completely randomly.
Pair Corralation between Federated Ultrashort and Sterling Capital
Assuming the 90 days horizon Federated Ultrashort is expected to generate 72.37 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Federated Ultrashort Bond is 24.22 times less risky than Sterling Capital. It trades about 0.08 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4,210 in Sterling Capital Stratton on September 2, 2024 and sell it today you would earn a total of 335.00 from holding Sterling Capital Stratton or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ultrashort Bond vs. Sterling Capital Stratton
Performance |
| Timeline |
| Federated Ultrashort Bond |
| Sterling Capital Stratton |
Federated Ultrashort and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ultrashort and Sterling Capital
The main advantage of trading using opposite Federated Ultrashort and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ultrashort 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.| Federated Ultrashort vs. Rationalpier 88 Convertible | Federated Ultrashort vs. Ab Bond Inflation | Federated Ultrashort vs. Ms Global Fixed | Federated Ultrashort vs. Calamos Dynamic Convertible |
| Sterling Capital vs. Ambrus Core Bond | Sterling Capital vs. Thrivent Income Fund | Sterling Capital vs. T Rowe Price | Sterling Capital vs. Federated Ultrashort Bond |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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