Correlation Between Quantitative and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Quantitative 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 Quantitative and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quantitative Longshort Equity and Sterling Capital Short, you can compare the effects of market volatilities on Quantitative 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 Quantitative with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative and Sterling Capital.
Diversification Opportunities for Quantitative and Sterling Capital
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Quantitative and STERLING is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Quantitative 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 Quantitative Longshort Equity 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 Short has no effect on the direction of Quantitative i.e., Quantitative and Sterling Capital go up and down completely randomly.
Pair Corralation between Quantitative and Sterling Capital
Assuming the 90 days horizon Quantitative Longshort Equity is expected to generate 5.55 times more return on investment than Sterling Capital. However, Quantitative is 5.55 times more volatile than Sterling Capital Short. It trades about 0.39 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.11 per unit of risk. If you would invest 1,405 in Quantitative Longshort Equity on August 29, 2024 and sell it today you would earn a total of 67.00 from holding Quantitative Longshort Equity or generate 4.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Quantitative Longshort Equity vs. Sterling Capital Short
Performance |
| Timeline |
| Quantitative Longshort |
| Sterling Capital Short |
Quantitative and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Quantitative and Sterling Capital
The main advantage of trading using opposite Quantitative and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantitative 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.| Quantitative vs. Neuberger Berman Long | Quantitative vs. Neuberger Berman Long | Quantitative vs. Diamond Hill Long Short | Quantitative vs. Pimco Rae Worldwide |
| Sterling Capital vs. Permanent Portfolio Class | Sterling Capital vs. HUMANA INC | Sterling Capital vs. Aquagold International | Sterling Capital vs. Barloworld Ltd ADR |
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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