Correlation Between Perritt Ultra and Sterling Capital

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

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

Diversification Opportunities for Perritt Ultra and Sterling Capital

0.0

Correlation Coefficient

Perritt Ultra  Sterling Capital

Pay attention - limited upside

The 3 months correlation between Perritt and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Perritt Ultra Microcap and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Perritt Ultra 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 Perritt Ultra Microcap 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 Stratton has no effect on the direction of Perritt Ultra i.e., Perritt Ultra and Sterling Capital go up and down completely randomly.

Pair Corralation between Perritt Ultra and Sterling Capital

If you would invest (100.00) in Perritt Ultra Microcap on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Perritt Ultra Microcap or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Perritt Ultra Microcap  vs.  Sterling Capital Stratton

Perritt Ultra Microcap

Risk-Adjusted Performance

Very Weak

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

Sterling Capital Stratton

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sterling Capital Stratton 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 Perritt Ultra and Sterling Capital

The main advantage of trading using opposite Perritt Ultra and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perritt Ultra 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 Perritt Ultra Microcap and Sterling Capital Stratton 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.