Correlation Between Global Technology and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Global Technology 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 Global Technology and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Technology Portfolio and Sterling Capital Behavioral, you can compare the effects of market volatilities on Global Technology 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 Global Technology with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Technology and Sterling Capital.
Diversification Opportunities for Global Technology and Sterling Capital
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Global and Sterling is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Global Technology Portfolio 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 Global Technology 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 Global Technology Portfolio 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 Global Technology i.e., Global Technology and Sterling Capital go up and down completely randomly.
Pair Corralation between Global Technology and Sterling Capital
Assuming the 90 days horizon Global Technology is expected to generate 5.67 times less return on investment than Sterling Capital. In addition to that, Global Technology is 1.67 times more volatile than Sterling Capital Behavioral. It trades about 0.02 of its total potential returns per unit of risk. Sterling Capital Behavioral is currently generating about 0.17 per unit of volatility. If you would invest 1,002 in Sterling Capital Behavioral on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Sterling Capital Behavioral or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Technology Portfolio vs. Sterling Capital Behavioral
Performance |
| Timeline |
| Global Technology |
| Sterling Capital Beh |
Global Technology and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Technology and Sterling Capital
The main advantage of trading using opposite Global Technology and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Technology 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.| Global Technology vs. Lord Abbett Small | Global Technology vs. Pace Smallmedium Value | Global Technology vs. Fpa Queens Road | Global Technology vs. Applied Finance Explorer |
| Sterling Capital vs. Angel Oak Financial | Sterling Capital vs. Prudential Jennison Financial | Sterling Capital vs. Transamerica Financial Life | Sterling Capital vs. Davis Financial Fund |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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