Correlation Between Siit Equity and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Siit Equity 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 Siit Equity and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Equity Factor and Sterling Capital Short, you can compare the effects of market volatilities on Siit Equity 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 Siit Equity with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Equity and Sterling Capital.
Diversification Opportunities for Siit Equity and Sterling Capital
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Siit and Sterling is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Siit Equity Factor and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Siit Equity 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 Siit Equity Factor 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 Short has no effect on the direction of Siit Equity i.e., Siit Equity and Sterling Capital go up and down completely randomly.
Pair Corralation between Siit Equity and Sterling Capital
Assuming the 90 days horizon Siit Equity Factor is expected to generate 5.9 times more return on investment than Sterling Capital. However, Siit Equity is 5.9 times more volatile than Sterling Capital Short. It trades about 0.23 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.25 per unit of risk. If you would invest 1,457 in Siit Equity Factor on November 8, 2024 and sell it today you would earn a total of 44.00 from holding Siit Equity Factor or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Siit Equity Factor vs. Sterling Capital Short
Performance |
| Timeline |
| Siit Equity Factor |
| Sterling Capital Short |
Siit Equity and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Equity and Sterling Capital
The main advantage of trading using opposite Siit Equity and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Equity 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.| Siit Equity vs. Global Diversified Income | Siit Equity vs. Madison Diversified Income | Siit Equity vs. Delaware Limited Term Diversified | Siit Equity vs. Aqr Diversified Arbitrage |
| Sterling Capital vs. Massmutual Premier High | Sterling Capital vs. Barings High Yield | Sterling Capital vs. Ultra Short Fixed Income | Sterling Capital vs. T Rowe Price |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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