Correlation Between Voya Prime and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Voya Prime 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 Voya Prime and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Prime Rate and Sterling Capital Total, you can compare the effects of market volatilities on Voya Prime 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 Voya Prime with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Prime and Sterling Capital.
Diversification Opportunities for Voya Prime and Sterling Capital
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Voya and Sterling is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Voya Prime Rate and Sterling Capital Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Total and Voya Prime 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 Voya Prime Rate 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 Total has no effect on the direction of Voya Prime i.e., Voya Prime and Sterling Capital go up and down completely randomly.
Pair Corralation between Voya Prime and Sterling Capital
Assuming the 90 days horizon Voya Prime Rate is expected to generate 2.44 times more return on investment than Sterling Capital. However, Voya Prime is 2.44 times more volatile than Sterling Capital Total. It trades about 0.68 of its potential returns per unit of risk. Sterling Capital Total is currently generating about 0.24 per unit of risk. If you would invest 747.00 in Voya Prime Rate on September 13, 2024 and sell it today you would earn a total of 46.00 from holding Voya Prime Rate or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Voya Prime Rate vs. Sterling Capital Total
Performance |
| Timeline |
| Voya Prime Rate |
| Sterling Capital Total |
Voya Prime and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Prime and Sterling Capital
The main advantage of trading using opposite Voya Prime and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Prime 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.| Voya Prime vs. Vanguard Total Stock | Voya Prime vs. Vanguard 500 Index | Voya Prime vs. Vanguard Total Stock | Voya Prime vs. Vanguard Total Stock |
| Sterling Capital vs. Barings Active Short | Sterling Capital vs. Easterly Snow Longshort | Sterling Capital vs. Rbc Short Duration | Sterling Capital vs. Kentucky Tax Free Short To Medium |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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