Correlation Between Lgm Risk and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Lgm Risk 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 Lgm Risk and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lgm Risk Managed and Sterling Capital Ultra, you can compare the effects of market volatilities on Lgm Risk 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 Lgm Risk with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgm Risk and Sterling Capital.
Diversification Opportunities for Lgm Risk and Sterling Capital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lgm and Sterling is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Lgm Risk Managed and Sterling Capital Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Ultra and Lgm Risk 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 Lgm Risk Managed 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 Ultra has no effect on the direction of Lgm Risk i.e., Lgm Risk and Sterling Capital go up and down completely randomly.
Pair Corralation between Lgm Risk and Sterling Capital
Assuming the 90 days horizon Lgm Risk Managed is expected to generate 5.03 times more return on investment than Sterling Capital. However, Lgm Risk is 5.03 times more volatile than Sterling Capital Ultra. It trades about 0.14 of its potential returns per unit of risk. Sterling Capital Ultra is currently generating about 0.27 per unit of risk. If you would invest 1,135 in Lgm Risk Managed on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Lgm Risk Managed or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lgm Risk Managed vs. Sterling Capital Ultra
Performance |
| Timeline |
| Lgm Risk Managed |
| Sterling Capital Ultra |
Lgm Risk and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgm Risk and Sterling Capital
The main advantage of trading using opposite Lgm Risk and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgm Risk 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.| Lgm Risk vs. Tax Managed Mid Small | Lgm Risk vs. Small Cap Stock | Lgm Risk vs. Tiaa Cref Smallmid Cap Equity | Lgm Risk vs. Guggenheim Diversified Income |
| Sterling Capital vs. Metropolitan West High | Sterling Capital vs. T Rowe Price | Sterling Capital vs. Lgm Risk Managed | Sterling Capital vs. Strategic Allocation Aggressive |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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