Correlation Between Touchstone Sands and Sterling Capital

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

Diversification Opportunities for Touchstone Sands and Sterling Capital

0.87

Correlation Coefficient

Touchstone Sands  Sterling Capital

Very poor diversification

The 3 months correlation between Touchstone and Sterling is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Sands Capital and Sterling Capital Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Beh and Touchstone Sands 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 Sands Capital 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 Beh has no effect on the direction of Touchstone Sands i.e., Touchstone Sands and Sterling Capital go up and down completely randomly.

Pair Corralation between Touchstone Sands and Sterling Capital

Assuming the 90 days horizon Touchstone Sands Capital is expected to generate 1.66 times more return on investment than Sterling Capital. However, Touchstone Sands is 1.66 times more volatile than Sterling Capital Behavioral. It trades about 0.21 of its potential returns per unit of risk. Sterling Capital Behavioral is currently generating about 0.11 per unit of risk. If you would invest  1,617  in Touchstone Sands Capital on September 16, 2024 and sell it today you would earn a total of  271.00  from holding Touchstone Sands Capital or generate 16.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Touchstone Sands Capital  vs.  Sterling Capital Behavioral

Touchstone Sands Capital

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Touchstone Sands Capital are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Touchstone Sands showed solid returns over the last few months and may actually be approaching a breakup point.

Sterling Capital Beh

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital Behavioral are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Sterling Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Touchstone Sands and Sterling Capital

The main advantage of trading using opposite Touchstone Sands and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Sands 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.

The idea behind Touchstone Sands Capital and Sterling Capital Behavioral 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.