Correlation Between Sterling Capital and Queens Road

Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Queens Road 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 Queens Road into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sterling Capital Short and Queens Road Value, you can compare the effects of market volatilities on Sterling Capital and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Queens Road.

Diversification Opportunities for Sterling Capital and Queens Road

-0.4

Correlation Coefficient

Sterling Capital  Queens Road

Very good diversification

The 3 months correlation between Sterling and Queens is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Queens Road Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Value 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 Short are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Value has no effect on the direction of Sterling Capital i.e., Sterling Capital and Queens Road go up and down completely randomly.

Pair Corralation between Sterling Capital and Queens Road

Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.11 times more return on investment than Queens Road. However, Sterling Capital Short is 8.85 times less risky than Queens Road. It trades about 0.2 of its potential returns per unit of risk. Queens Road Value is currently generating about -0.02 per unit of risk. If you would invest  827.00  in Sterling Capital Short on December 30, 2024 and sell it today you would earn a total of  11.00  from holding Sterling Capital Short or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sterling Capital Short  vs.  Queens Road Value

Sterling Capital Short

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital Short are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Sterling Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Queens Road Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Queens Road Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Queens Road is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sterling Capital and Queens Road

The main advantage of trading using opposite Sterling Capital and Queens Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Queens Road 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 Queens Road will offset losses from the drop in Queens Road's long position.

The idea behind Sterling Capital Short and Queens Road Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.