Correlation Between Commodities Strategy and Sterling Capital

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Sterling Capital Special, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Sterling Capital.

Diversification Opportunities for Commodities Strategy and Sterling Capital

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Commodities and Sterling is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Sterling Capital Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Special and Commodities Strategy 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 Commodities Strategy Fund 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 Special has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Sterling Capital go up and down completely randomly.

Pair Corralation between Commodities Strategy and Sterling Capital

Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 0.59 times more return on investment than Sterling Capital. However, Commodities Strategy Fund is 1.7 times less risky than Sterling Capital. It trades about 0.05 of its potential returns per unit of risk. Sterling Capital Special is currently generating about -0.04 per unit of risk. If you would invest  2,861  in Commodities Strategy Fund on September 18, 2024 and sell it today you would earn a total of  90.00  from holding Commodities Strategy Fund or generate 3.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Commodities Strategy Fund  vs.  Sterling Capital Special

 Performance 
       Timeline  
Commodities Strategy 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Commodities Strategy Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Commodities Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Sterling Capital Special 

Risk-Adjusted Performance

0 of 100

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

Commodities Strategy and Sterling Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Commodities Strategy and Sterling Capital

The main advantage of trading using opposite Commodities Strategy and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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 Commodities Strategy Fund and Sterling Capital Special 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.
Check out your portfolio center.
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

Other Complementary Tools

Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Fundamental Analysis
View fundamental data based on most recent published financial statements