Correlation Between Ppm High and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Ppm High 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 Ppm High and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ppm High Yield and Sterling Capital Special, you can compare the effects of market volatilities on Ppm High 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 Ppm High with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ppm High and Sterling Capital.
Diversification Opportunities for Ppm High and Sterling Capital
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ppm and Sterling is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Ppm High Yield and Sterling Capital Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Special and Ppm High 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 Ppm High Yield 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 Special has no effect on the direction of Ppm High i.e., Ppm High and Sterling Capital go up and down completely randomly.
Pair Corralation between Ppm High and Sterling Capital
Assuming the 90 days horizon Ppm High is expected to generate 3.34 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Ppm High Yield is 5.08 times less risky than Sterling Capital. It trades about 0.22 of its potential returns per unit of risk. Sterling Capital Special is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,799 in Sterling Capital Special on September 1, 2024 and sell it today you would earn a total of 487.00 from holding Sterling Capital Special or generate 17.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ppm High Yield vs. Sterling Capital Special
Performance |
| Timeline |
| Ppm High Yield |
| Sterling Capital Special |
Ppm High and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ppm High and Sterling Capital
The main advantage of trading using opposite Ppm High and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ppm High 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.| Ppm High vs. Oppenheimer International Diversified | Ppm High vs. Western Asset Diversified | Ppm High vs. Aqr Diversified Arbitrage | Ppm High vs. Principal Lifetime Hybrid |
| Sterling Capital vs. Ab Value Fund | Sterling Capital vs. Eic Value Fund | Sterling Capital vs. Artisan Thematic Fund | Sterling Capital vs. Small Cap Stock |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |