Correlation Between Sterling Capital and Eic Value
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Eic Value 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 Eic Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Special and Eic Value Fund, you can compare the effects of market volatilities on Sterling Capital and Eic Value 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 Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Eic Value.
Diversification Opportunities for Sterling Capital and Eic Value
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and Eic is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund 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 Special are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Sterling Capital i.e., Sterling Capital and Eic Value go up and down completely randomly.
Pair Corralation between Sterling Capital and Eic Value
Assuming the 90 days horizon Sterling Capital is expected to generate 1.1 times less return on investment than Eic Value. In addition to that, Sterling Capital is 1.52 times more volatile than Eic Value Fund. It trades about 0.05 of its total potential returns per unit of risk. Eic Value Fund is currently generating about 0.08 per unit of volatility. If you would invest 1,477 in Eic Value Fund on September 3, 2024 and sell it today you would earn a total of 445.00 from holding Eic Value Fund or generate 30.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Special vs. Eic Value Fund
Performance |
| Timeline |
| Sterling Capital Special |
| Eic Value Fund |
Sterling Capital and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Eic Value
The main advantage of trading using opposite Sterling Capital and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.| Sterling Capital vs. Vanguard Total Stock | Sterling Capital vs. Vanguard 500 Index | Sterling Capital vs. Vanguard Total Stock | Sterling Capital vs. Vanguard Total Stock |
| Eic Value vs. Tax Managed Mid Small | Eic Value vs. Legg Mason Bw | Eic Value vs. Jhancock Diversified Macro | Eic Value vs. Davenport Small Cap |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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