Correlation Between Pender Real and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Pender Real 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 Pender Real and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pender Real Estate and Sterling Capital Ultra, you can compare the effects of market volatilities on Pender Real 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 Pender Real with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pender Real and Sterling Capital.
Diversification Opportunities for Pender Real and Sterling Capital
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pender and Sterling is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Pender Real Estate and Sterling Capital Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Ultra and Pender Real 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 Pender Real Estate 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 Ultra has no effect on the direction of Pender Real i.e., Pender Real and Sterling Capital go up and down completely randomly.
Pair Corralation between Pender Real and Sterling Capital
Assuming the 90 days horizon Pender Real Estate is expected to generate about the same return on investment as Sterling Capital Ultra. However, Pender Real is 1.47 times more volatile than Sterling Capital Ultra. It trades about 0.13 of its potential returns per unit of risk. Sterling Capital Ultra is currently producing about 0.2 per unit of risk. If you would invest 977.00 in Sterling Capital Ultra on September 13, 2024 and sell it today you would earn a total of 6.00 from holding Sterling Capital Ultra or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
Pender Real Estate vs. Sterling Capital Ultra
Performance |
| Timeline |
| Pender Real Estate |
| Sterling Capital Ultra |
Pender Real and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pender Real and Sterling Capital
The main advantage of trading using opposite Pender Real and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pender Real 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.| Pender Real vs. Ab Global Risk | Pender Real vs. Calvert High Yield | Pender Real vs. Alliancebernstein Global High | Pender Real vs. Ab High Income |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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