Correlation Between Putnman Retirement and Sterling Capital

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

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

Diversification Opportunities for Putnman Retirement and Sterling Capital

-0.24

Correlation Coefficient

Putnman Retirement  Sterling Capital

Very good diversification

The 3 months correlation between Putnman and Sterling is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Putnman Retirement Ready and Sterling Capital Securitized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Sec and Putnman Retirement 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 Putnman Retirement Ready 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 Sec has no effect on the direction of Putnman Retirement i.e., Putnman Retirement and Sterling Capital go up and down completely randomly.

Pair Corralation between Putnman Retirement and Sterling Capital

Assuming the 90 days horizon Putnman Retirement Ready is expected to under-perform the Sterling Capital. In addition to that, Putnman Retirement is 1.54 times more volatile than Sterling Capital Securitized. It trades about -0.03 of its total potential returns per unit of risk. Sterling Capital Securitized is currently generating about 0.14 per unit of volatility. If you would invest  877.00  in Sterling Capital Securitized on December 27, 2024 and sell it today you would earn a total of  21.00  from holding Sterling Capital Securitized or generate 2.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Putnman Retirement Ready  vs.  Sterling Capital Securitized

Putnman Retirement Ready

Risk-Adjusted Performance

Very Weak

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

Sterling Capital Sec

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital Securitized are ranked lower than 10 (%) 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 Putnman Retirement and Sterling Capital

The main advantage of trading using opposite Putnman Retirement and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putnman Retirement 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 Putnman Retirement Ready and Sterling Capital Securitized 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.