Correlation Between Sterling Capital and California Bond
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on Sterling Capital and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and California Bond.
Diversification Opportunities for Sterling Capital and California Bond
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and California is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Sterling Capital i.e., Sterling Capital and California Bond go up and down completely randomly.
Pair Corralation between Sterling Capital and California Bond
Assuming the 90 days horizon Sterling Capital Special is expected to generate 4.27 times more return on investment than California Bond. However, Sterling Capital is 4.27 times more volatile than California Bond Fund. It trades about 0.04 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 2,823 in Sterling Capital Special on September 2, 2024 and sell it today you would earn a total of 463.00 from holding Sterling Capital Special or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Special vs. California Bond Fund
Performance |
| Timeline |
| Sterling Capital Special |
| California Bond |
Sterling Capital and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and California Bond
The main advantage of trading using opposite Sterling Capital and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Sterling Capital vs. Ab Value Fund | Sterling Capital vs. Eic Value Fund | Sterling Capital vs. Artisan Thematic Fund | Sterling Capital vs. Small Cap Stock |
| California Bond vs. Tiaa Cref Lifestyle Moderate | California Bond vs. Fidelity Managed Retirement | California Bond vs. Transamerica Cleartrack Retirement | California Bond vs. Dimensional Retirement Income |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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