Correlation Between Sterling Capital and Columbia Real
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Columbia Real 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 Columbia Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Equity and Columbia Real Estate, you can compare the effects of market volatilities on Sterling Capital and Columbia Real 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 Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Columbia Real.
Diversification Opportunities for Sterling Capital and Columbia Real
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and COLUMBIA is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Equity and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate 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 Equity are associated (or correlated) with Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of Sterling Capital i.e., Sterling Capital and Columbia Real go up and down completely randomly.
Pair Corralation between Sterling Capital and Columbia Real
Assuming the 90 days horizon Sterling Capital Equity is expected to generate 0.88 times more return on investment than Columbia Real. However, Sterling Capital Equity is 1.14 times less risky than Columbia Real. It trades about 0.27 of its potential returns per unit of risk. Columbia Real Estate is currently generating about 0.15 per unit of risk. If you would invest 2,825 in Sterling Capital Equity on September 4, 2024 and sell it today you would earn a total of 126.00 from holding Sterling Capital Equity or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Equity vs. Columbia Real Estate
Performance |
| Timeline |
| Sterling Capital Equity |
| Columbia Real Estate |
Sterling Capital and Columbia Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Columbia Real
The main advantage of trading using opposite Sterling Capital and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Columbia Real 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 Columbia Real will offset losses from the drop in Columbia Real's long position.| Sterling Capital vs. Sterling Capital Special | Sterling Capital vs. Blackrock Hi Yld | Sterling Capital vs. Large Cap Fund | Sterling Capital vs. Sterling Capital Equity |
| Columbia Real vs. Realty Income | Columbia Real vs. Dynex Capital | Columbia Real vs. First Industrial Realty | Columbia Real vs. Healthcare Realty Trust |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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