Correlation Between Sterling Capital and Putnam Sustainable
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Putnam Sustainable 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 Sterling Capital and Putnam Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Focus and Putnam Sustainable Future, you can compare the effects of market volatilities on Sterling Capital and Putnam Sustainable 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 Sterling Capital with a short position of Putnam Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Putnam Sustainable.
Diversification Opportunities for Sterling Capital and Putnam Sustainable
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and Putnam is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Focus and Putnam Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Sustainable Future and Sterling Capital 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 Sterling Capital Focus are associated (or correlated) with Putnam Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Sustainable Future has no effect on the direction of Sterling Capital i.e., Sterling Capital and Putnam Sustainable go up and down completely randomly.
Pair Corralation between Sterling Capital and Putnam Sustainable
Considering the 90-day investment horizon Sterling Capital Focus is expected to generate 1.24 times more return on investment than Putnam Sustainable. However, Sterling Capital is 1.24 times more volatile than Putnam Sustainable Future. It trades about 0.12 of its potential returns per unit of risk. Putnam Sustainable Future is currently generating about 0.09 per unit of risk. If you would invest 2,613 in Sterling Capital Focus on September 1, 2024 and sell it today you would earn a total of 527.00 from holding Sterling Capital Focus or generate 20.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sterling Capital Focus vs. Putnam Sustainable Future
Performance |
| Timeline |
| Sterling Capital Focus |
| Putnam Sustainable Future |
Sterling Capital and Putnam Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Putnam Sustainable
The main advantage of trading using opposite Sterling Capital and Putnam Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Putnam Sustainable 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 Putnam Sustainable will offset losses from the drop in Putnam Sustainable's long position.| Sterling Capital vs. Vanguard Growth Index | Sterling Capital vs. iShares Russell 1000 | Sterling Capital vs. iShares SP 500 | Sterling Capital vs. iShares Core SP |
| Putnam Sustainable vs. Putnam Sustainable Leaders | Putnam Sustainable vs. Putnam Focused Large | Putnam Sustainable vs. FlexShares STOXX Global | Putnam Sustainable vs. Putnam Focused Large |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |