Correlation Between Sterling Capital and SPACE

Can any of the company-specific risk be diversified away by investing in both Sterling Capital and SPACE 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 SPACE 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 SPACE, you can compare the effects of market volatilities on Sterling Capital and SPACE 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 SPACE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and SPACE.

Diversification Opportunities for Sterling Capital and SPACE

-0.9

Correlation Coefficient

Sterling Capital  SPACE

Pay attention - limited upside

The 3 months correlation between Sterling and SPACE is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and SPACE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPACE 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 SPACE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPACE has no effect on the direction of Sterling Capital i.e., Sterling Capital and SPACE go up and down completely randomly.

Pair Corralation between Sterling Capital and SPACE

Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.02 times more return on investment than SPACE. However, Sterling Capital Short is 53.31 times less risky than SPACE. It trades about 0.21 of its potential returns per unit of risk. SPACE is currently generating about -0.12 per unit of risk. If you would invest  825.00  in Sterling Capital Short on December 29, 2024 and sell it today you would earn a total of  13.00  from holding Sterling Capital Short or generate 1.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Sterling Capital Short  vs.  SPACE

Sterling Capital Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital Short are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and 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.

SPACE

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPACE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for SPACE shareholders.

Pair Trading with Sterling Capital and SPACE

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

The idea behind Sterling Capital Short and SPACE 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.