Correlation Between Saat Moderate and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Saat Moderate 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 Saat Moderate and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Moderate Strategy and Sterling Capital Stratton, you can compare the effects of market volatilities on Saat Moderate 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 Saat Moderate with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Moderate and Sterling Capital.
Diversification Opportunities for Saat Moderate and Sterling Capital
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Saat and STERLING is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Saat Moderate Strategy and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Saat Moderate 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 Saat Moderate Strategy 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 Stratton has no effect on the direction of Saat Moderate i.e., Saat Moderate and Sterling Capital go up and down completely randomly.
Pair Corralation between Saat Moderate and Sterling Capital
Assuming the 90 days horizon Saat Moderate Strategy is expected to generate 0.16 times more return on investment than Sterling Capital. However, Saat Moderate Strategy is 6.24 times less risky than Sterling Capital. It trades about 0.1 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about -0.02 per unit of risk. If you would invest 1,037 in Saat Moderate Strategy on November 28, 2024 and sell it today you would earn a total of 145.00 from holding Saat Moderate Strategy or generate 13.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Moderate Strategy vs. Sterling Capital Stratton
Performance |
| Timeline |
| Saat Moderate Strategy |
| Sterling Capital Stratton |
Saat Moderate and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Moderate and Sterling Capital
The main advantage of trading using opposite Saat Moderate and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Moderate 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.The idea behind Saat Moderate Strategy and Sterling Capital Stratton pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sterling Capital vs. Government Securities Fund | Sterling Capital vs. Virtus Seix Government | Sterling Capital vs. Transamerica Funds | Sterling Capital vs. Inverse Government Long |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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