Correlation Between Touchstone Large and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Touchstone Large and Sterling Capital 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 Touchstone Large and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Large Cap and Sterling Capital Securitized, you can compare the effects of market volatilities on Touchstone Large and Sterling Capital 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 Touchstone Large with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Large and Sterling Capital.
Diversification Opportunities for Touchstone Large and Sterling Capital
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Touchstone and Sterling is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Large Cap and Sterling Capital Securitized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Sec and Touchstone Large 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 Touchstone Large Cap are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Sec has no effect on the direction of Touchstone Large i.e., Touchstone Large and Sterling Capital go up and down completely randomly.
Pair Corralation between Touchstone Large and Sterling Capital
Assuming the 90 days horizon Touchstone Large Cap is expected to generate 2.37 times more return on investment than Sterling Capital. However, Touchstone Large is 2.37 times more volatile than Sterling Capital Securitized. It trades about 0.16 of its potential returns per unit of risk. Sterling Capital Securitized is currently generating about -0.1 per unit of risk. If you would invest 1,898 in Touchstone Large Cap on September 12, 2024 and sell it today you would earn a total of 123.00 from holding Touchstone Large Cap or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Large Cap vs. Sterling Capital Securitized
Performance |
| Timeline |
| Touchstone Large Cap |
| Sterling Capital Sec |
Touchstone Large and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Large and Sterling Capital
The main advantage of trading using opposite Touchstone Large and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Large position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Touchstone Large vs. Jhancock Disciplined Value | Touchstone Large vs. Fidelity Series 1000 | Touchstone Large vs. Dana Large Cap | Touchstone Large vs. Americafirst Large Cap |
| Sterling Capital vs. Jhancock Global Equity | Sterling Capital vs. Scharf Global Opportunity | Sterling Capital vs. Ab Global Risk | Sterling Capital vs. Artisan Global Unconstrained |
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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