Correlation Between Scharf Global and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Scharf Global 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 Scharf Global and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Sterling Capital Intermediate, you can compare the effects of market volatilities on Scharf Global 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 Scharf Global with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Sterling Capital.
Diversification Opportunities for Scharf Global and Sterling Capital
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scharf and Sterling is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Sterling Capital Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Int and Scharf Global 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 Scharf Global Opportunity 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 Int has no effect on the direction of Scharf Global i.e., Scharf Global and Sterling Capital go up and down completely randomly.
Pair Corralation between Scharf Global and Sterling Capital
Assuming the 90 days horizon Scharf Global Opportunity is expected to generate 2.48 times more return on investment than Sterling Capital. However, Scharf Global is 2.48 times more volatile than Sterling Capital Intermediate. It trades about 0.13 of its potential returns per unit of risk. Sterling Capital Intermediate is currently generating about 0.11 per unit of risk. If you would invest 3,468 in Scharf Global Opportunity on September 1, 2024 and sell it today you would earn a total of 361.00 from holding Scharf Global Opportunity or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Sterling Capital Intermediate
Performance |
| Timeline |
| Scharf Global Opportunity |
| Sterling Capital Int |
Scharf Global and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Sterling Capital
The main advantage of trading using opposite Scharf Global and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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.| Scharf Global vs. Ab Select Equity | Scharf Global vs. Cutler Equity | Scharf Global vs. Jpmorgan Equity Income | Scharf Global vs. Multimedia Portfolio Multimedia |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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