Correlation Between Sterling Capital and Mfs International
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Mfs International 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 Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Stratton and Mfs International New, you can compare the effects of market volatilities on Sterling Capital and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Mfs International.
Diversification Opportunities for Sterling Capital and Mfs International
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sterling and Mfs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Mfs International New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International New 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 Stratton are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International New has no effect on the direction of Sterling Capital i.e., Sterling Capital and Mfs International go up and down completely randomly.
Pair Corralation between Sterling Capital and Mfs International
Assuming the 90 days horizon Sterling Capital is expected to generate 2.49 times less return on investment than Mfs International. In addition to that, Sterling Capital is 1.38 times more volatile than Mfs International New. It trades about 0.07 of its total potential returns per unit of risk. Mfs International New is currently generating about 0.23 per unit of volatility. If you would invest 2,837 in Mfs International New on November 27, 2024 and sell it today you would earn a total of 77.00 from holding Mfs International New or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Mfs International New
Performance |
| Timeline |
| Sterling Capital Stratton |
| Mfs International New |
Sterling Capital and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Mfs International
The main advantage of trading using opposite Sterling Capital and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Mfs International 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 Mfs International will offset losses from the drop in Mfs International's long position.| Sterling Capital vs. Columbia Real Estate | Sterling Capital vs. Alpine Realty Income | Sterling Capital vs. Davis Real Estate | Sterling Capital vs. Sterling Capital Stratton |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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