Correlation Between Blackrock Strategic and Sterling Capital

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Can any of the company-specific risk be diversified away by investing in both Blackrock Strategic 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 Blackrock Strategic and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Strategic Global and Sterling Capital Total, you can compare the effects of market volatilities on Blackrock Strategic 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 Blackrock Strategic with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Strategic and Sterling Capital.

Diversification Opportunities for Blackrock Strategic and Sterling Capital

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Blackrock and Sterling is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Strategic Global and Sterling Capital Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Total and Blackrock Strategic 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 Blackrock Strategic Global 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 Total has no effect on the direction of Blackrock Strategic i.e., Blackrock Strategic and Sterling Capital go up and down completely randomly.

Pair Corralation between Blackrock Strategic and Sterling Capital

Assuming the 90 days horizon Blackrock Strategic is expected to generate 2.37 times less return on investment than Sterling Capital. In addition to that, Blackrock Strategic is 1.2 times more volatile than Sterling Capital Total. It trades about 0.03 of its total potential returns per unit of risk. Sterling Capital Total is currently generating about 0.08 per unit of volatility. If you would invest  952.00  in Sterling Capital Total on September 14, 2024 and sell it today you would earn a total of  51.00  from holding Sterling Capital Total or generate 5.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.6%
ValuesDaily Returns

Blackrock Strategic Global  vs.  Sterling Capital Total

 Performance 
       Timeline  
Blackrock Strategic 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Blackrock Strategic Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Sterling Capital Total 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sterling Capital Total has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Sterling Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Blackrock Strategic and Sterling Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blackrock Strategic and Sterling Capital

The main advantage of trading using opposite Blackrock Strategic and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Strategic 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.
The idea behind Blackrock Strategic Global and Sterling Capital Total pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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