Correlation Between Sterling Capital and Guidepath(r) Managed
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Guidepath(r) Managed 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 Sterling Capital and Guidepath(r) Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Behavioral and Guidepath Managed Futures, you can compare the effects of market volatilities on Sterling Capital and Guidepath(r) Managed 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 Sterling Capital with a short position of Guidepath(r) Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Guidepath(r) Managed.
Diversification Opportunities for Sterling Capital and Guidepath(r) Managed
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and Guidepath(r) is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Behavioral and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures and Sterling Capital 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 Sterling Capital Behavioral are associated (or correlated) with Guidepath(r) Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Sterling Capital i.e., Sterling Capital and Guidepath(r) Managed go up and down completely randomly.
Pair Corralation between Sterling Capital and Guidepath(r) Managed
Assuming the 90 days horizon Sterling Capital Behavioral is expected to under-perform the Guidepath(r) Managed. In addition to that, Sterling Capital is 1.58 times more volatile than Guidepath Managed Futures. It trades about -0.06 of its total potential returns per unit of risk. Guidepath Managed Futures is currently generating about 0.2 per unit of volatility. If you would invest 769.00 in Guidepath Managed Futures on September 4, 2024 and sell it today you would earn a total of 18.00 from holding Guidepath Managed Futures or generate 2.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sterling Capital Behavioral vs. Guidepath Managed Futures
Performance |
| Timeline |
| Sterling Capital Beh |
| Guidepath Managed Futures |
Sterling Capital and Guidepath(r) Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Guidepath(r) Managed
The main advantage of trading using opposite Sterling Capital and Guidepath(r) Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Guidepath(r) Managed 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 Guidepath(r) Managed will offset losses from the drop in Guidepath(r) Managed's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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