Correlation Between Sterling Capital and Sentinel Multi-asset
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Sentinel Multi-asset 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 Sentinel Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Total and Sentinel Multi Asset Income, you can compare the effects of market volatilities on Sterling Capital and Sentinel Multi-asset 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 Sentinel Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Sentinel Multi-asset.
Diversification Opportunities for Sterling Capital and Sentinel Multi-asset
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sterling and Sentinel is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Total and Sentinel Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Multi Asset 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 Total are associated (or correlated) with Sentinel Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Multi Asset has no effect on the direction of Sterling Capital i.e., Sterling Capital and Sentinel Multi-asset go up and down completely randomly.
Pair Corralation between Sterling Capital and Sentinel Multi-asset
Assuming the 90 days horizon Sterling Capital is expected to generate 8.19 times less return on investment than Sentinel Multi-asset. But when comparing it to its historical volatility, Sterling Capital Total is 4.88 times less risky than Sentinel Multi-asset. It trades about 0.11 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,972 in Sentinel Multi Asset Income on August 30, 2024 and sell it today you would earn a total of 307.00 from holding Sentinel Multi Asset Income or generate 6.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Total vs. Sentinel Multi Asset Income
Performance |
| Timeline |
| Sterling Capital Total |
| Sentinel Multi Asset |
Sterling Capital and Sentinel Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Sentinel Multi-asset
The main advantage of trading using opposite Sterling Capital and Sentinel Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Sentinel Multi-asset 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 Sentinel Multi-asset will offset losses from the drop in Sentinel Multi-asset's long position.| Sterling Capital vs. Artisan High Income | Sterling Capital vs. Versatile Bond Portfolio | Sterling Capital vs. John Hancock Money | Sterling Capital vs. Ambrus Core Bond |
| Sentinel Multi-asset vs. Invesco Gold Special | Sentinel Multi-asset vs. James Balanced Golden | Sentinel Multi-asset vs. Gold Portfolio Fidelity | Sentinel Multi-asset vs. First Eagle Gold |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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