Correlation Between Goehring Rozencwajg and Sterling Capital

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

By analyzing existing cross correlation between Goehring Rozencwajg Resources and Sterling Capital Total, you can compare the effects of market volatilities on Goehring Rozencwajg 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 Goehring Rozencwajg with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goehring Rozencwajg and Sterling Capital.

Diversification Opportunities for Goehring Rozencwajg and Sterling Capital

-0.51

Correlation Coefficient

Goehring Rozencwajg  Sterling Capital

Excellent diversification

The 3 months correlation between Goehring and Sterling is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Goehring Rozencwajg Resources 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 Goehring Rozencwajg 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 Goehring Rozencwajg Resources 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 Goehring Rozencwajg i.e., Goehring Rozencwajg and Sterling Capital go up and down completely randomly.

Pair Corralation between Goehring Rozencwajg and Sterling Capital

Assuming the 90 days horizon Goehring Rozencwajg Resources is expected to under-perform the Sterling Capital. In addition to that, Goehring Rozencwajg is 5.58 times more volatile than Sterling Capital Total. It trades about -0.26 of its total potential returns per unit of risk. Sterling Capital Total is currently generating about 0.07 per unit of volatility. If you would invest  926.00  in Sterling Capital Total on September 19, 2024 and sell it today you would earn a total of  4.00  from holding Sterling Capital Total or generate 0.43% return on investment over 90 days.

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

Goehring Rozencwajg Resources  vs.  Sterling Capital Total

Goehring Rozencwajg

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sterling Capital Total

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sterling Capital Total has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Goehring Rozencwajg and Sterling Capital

The main advantage of trading using opposite Goehring Rozencwajg and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goehring Rozencwajg 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 Goehring Rozencwajg Resources and Sterling Capital Total 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.