Correlation Between Multisector Bond and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Multisector Bond 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 Multisector Bond and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multisector Bond Sma and Sterling Capital Short, you can compare the effects of market volatilities on Multisector Bond 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 Multisector Bond with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multisector Bond and Sterling Capital.
Diversification Opportunities for Multisector Bond and Sterling Capital
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multisector and Sterling is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Multisector Bond Sma 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 Multisector Bond 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 Multisector Bond Sma 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 Multisector Bond i.e., Multisector Bond and Sterling Capital go up and down completely randomly.
Pair Corralation between Multisector Bond and Sterling Capital
Assuming the 90 days horizon Multisector Bond Sma is expected to generate 2.9 times more return on investment than Sterling Capital. However, Multisector Bond is 2.9 times more volatile than Sterling Capital Short. It trades about 0.15 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.18 per unit of risk. If you would invest 1,165 in Multisector Bond Sma on September 1, 2024 and sell it today you would earn a total of 207.00 from holding Multisector Bond Sma or generate 17.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multisector Bond Sma vs. Sterling Capital Short
Performance |
| Timeline |
| Multisector Bond Sma |
| Sterling Capital Short |
Multisector Bond and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multisector Bond and Sterling Capital
The main advantage of trading using opposite Multisector Bond and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multisector Bond 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.| Multisector Bond vs. Siit High Yield | Multisector Bond vs. Msift High Yield | Multisector Bond vs. Valic Company I | Multisector Bond vs. Pace High Yield |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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