Correlation Between Guggenheim High and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Guggenheim 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 Guggenheim 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 Guggenheim High Yield and Sterling Capital Short, you can compare the effects of market volatilities on Guggenheim 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 Guggenheim High with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Sterling Capital.
Diversification Opportunities for Guggenheim High and Sterling Capital
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guggenheim and Sterling is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield 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 Guggenheim 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 Guggenheim 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 Short has no effect on the direction of Guggenheim High i.e., Guggenheim High and Sterling Capital go up and down completely randomly.
Pair Corralation between Guggenheim High and Sterling Capital
Assuming the 90 days horizon Guggenheim High is expected to generate 1.94 times less return on investment than Sterling Capital. In addition to that, Guggenheim High is 1.52 times more volatile than Sterling Capital Short. It trades about 0.07 of its total potential returns per unit of risk. Sterling Capital Short is currently generating about 0.21 per unit of volatility. If you would invest 832.00 in Sterling Capital Short on November 7, 2024 and sell it today you would earn a total of 4.00 from holding Sterling Capital Short or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim High Yield vs. Sterling Capital Short
Performance |
| Timeline |
| Guggenheim High Yield |
| Sterling Capital Short |
Guggenheim High and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim High and Sterling Capital
The main advantage of trading using opposite Guggenheim High and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim 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.| Guggenheim High vs. Us Vector Equity | Guggenheim High vs. Transamerica International Equity | Guggenheim High vs. Aqr Long Short Equity | Guggenheim High vs. Ultra Short Fixed Income |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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