Correlation Between Sterling Capital and Payden Floating
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Payden Floating 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 Payden Floating 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 Payden Floating Rate, you can compare the effects of market volatilities on Sterling Capital and Payden Floating 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 Payden Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Payden Floating.
Diversification Opportunities for Sterling Capital and Payden Floating
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sterling and Payden is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Payden Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Floating Rate 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 Payden Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Floating Rate has no effect on the direction of Sterling Capital i.e., Sterling Capital and Payden Floating go up and down completely randomly.
Pair Corralation between Sterling Capital and Payden Floating
Assuming the 90 days horizon Sterling Capital Stratton is expected to generate 10.6 times more return on investment than Payden Floating. However, Sterling Capital is 10.6 times more volatile than Payden Floating Rate. It trades about 0.07 of its potential returns per unit of risk. Payden Floating Rate is currently generating about 0.07 per unit of risk. If you would invest 3,596 in Sterling Capital Stratton on November 27, 2024 and sell it today you would earn a total of 37.00 from holding Sterling Capital Stratton or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Payden Floating Rate
Performance |
| Timeline |
| Sterling Capital Stratton |
| Payden Floating Rate |
Sterling Capital and Payden Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Payden Floating
The main advantage of trading using opposite Sterling Capital and Payden Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Payden Floating 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 Payden Floating will offset losses from the drop in Payden Floating'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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