Correlation Between Locorr Longshort and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Locorr Longshort 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 Locorr Longshort and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Locorr Longshort Modities and Sterling Capital Short, you can compare the effects of market volatilities on Locorr Longshort 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 Locorr Longshort with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Locorr Longshort and Sterling Capital.
Diversification Opportunities for Locorr Longshort and Sterling Capital
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Locorr and Sterling is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Locorr Longshort Modities 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 Locorr Longshort 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 Locorr Longshort Modities 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 Locorr Longshort i.e., Locorr Longshort and Sterling Capital go up and down completely randomly.
Pair Corralation between Locorr Longshort and Sterling Capital
Assuming the 90 days horizon Locorr Longshort Modities is expected to under-perform the Sterling Capital. In addition to that, Locorr Longshort is 1.95 times more volatile than Sterling Capital Short. It trades about -0.05 of its total potential returns per unit of risk. Sterling Capital Short is currently generating about 0.13 per unit of volatility. If you would invest 758.00 in Sterling Capital Short on September 3, 2024 and sell it today you would earn a total of 78.00 from holding Sterling Capital Short or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Locorr Longshort Modities vs. Sterling Capital Short
Performance |
| Timeline |
| Locorr Longshort Modities |
| Sterling Capital Short |
Locorr Longshort and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Locorr Longshort and Sterling Capital
The main advantage of trading using opposite Locorr Longshort and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Locorr Longshort 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.| Locorr Longshort vs. First American Funds | Locorr Longshort vs. Matson Money Equity | Locorr Longshort vs. Lord Abbett Emerging | Locorr Longshort vs. Janus Investment |
| Sterling Capital vs. Europac Gold Fund | Sterling Capital vs. Oppenheimer Gold Special | Sterling Capital vs. Franklin Gold Precious | Sterling Capital vs. Goldman Sachs Short |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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