Correlation Between Us Strategic and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Us 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 Us 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 Us Strategic Equity and Sterling Capital Special, you can compare the effects of market volatilities on Us 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 Us Strategic with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Strategic and Sterling Capital.
Diversification Opportunities for Us Strategic and Sterling Capital
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RUSTX and Sterling is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Us Strategic Equity 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 Us 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 Us Strategic Equity 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 Us Strategic i.e., Us Strategic and Sterling Capital go up and down completely randomly.
Pair Corralation between Us Strategic and Sterling Capital
Assuming the 90 days horizon Us Strategic is expected to generate 1.11 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Us Strategic Equity is 1.66 times less risky than Sterling Capital. It trades about 0.08 of its potential returns per unit of risk. Sterling Capital Special is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,279 in Sterling Capital Special on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Sterling Capital Special or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Us Strategic Equity vs. Sterling Capital Special
Performance |
| Timeline |
| Us Strategic Equity |
| Sterling Capital Special |
Us Strategic and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Strategic and Sterling Capital
The main advantage of trading using opposite Us Strategic and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us 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.| Us Strategic vs. Vanguard Total Stock | Us Strategic vs. Vanguard 500 Index | Us Strategic vs. Vanguard Total Stock | Us Strategic vs. Vanguard Total Stock |
| Sterling Capital vs. Dodge International Stock | Sterling Capital vs. Us Strategic Equity | Sterling Capital vs. Rbc Global Equity | Sterling Capital vs. Locorr Dynamic Equity |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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