Correlation Between Sterling Capital and Pace Small/medium
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Pace Small/medium 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 Sterling Capital and Pace Small/medium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Securitized and Pace Smallmedium Value, you can compare the effects of market volatilities on Sterling Capital and Pace Small/medium 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 Sterling Capital with a short position of Pace Small/medium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Pace Small/medium.
Diversification Opportunities for Sterling Capital and Pace Small/medium
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sterling and Pace is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Securitized and Pace Smallmedium Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Smallmedium Value and Sterling Capital 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 Sterling Capital Securitized are associated (or correlated) with Pace Small/medium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Smallmedium Value has no effect on the direction of Sterling Capital i.e., Sterling Capital and Pace Small/medium go up and down completely randomly.
Pair Corralation between Sterling Capital and Pace Small/medium
Assuming the 90 days horizon Sterling Capital Securitized is expected to generate 0.2 times more return on investment than Pace Small/medium. However, Sterling Capital Securitized is 4.94 times less risky than Pace Small/medium. It trades about 0.08 of its potential returns per unit of risk. Pace Smallmedium Value is currently generating about -0.05 per unit of risk. If you would invest 859.00 in Sterling Capital Securitized on December 5, 2024 and sell it today you would earn a total of 47.00 from holding Sterling Capital Securitized or generate 5.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sterling Capital Securitized vs. Pace Smallmedium Value
Performance |
Timeline |
Sterling Capital Sec |
Pace Smallmedium Value |
Sterling Capital and Pace Small/medium Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sterling Capital and Pace Small/medium
The main advantage of trading using opposite Sterling Capital and Pace Small/medium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Pace Small/medium 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 Pace Small/medium will offset losses from the drop in Pace Small/medium's long position.Sterling Capital vs. Calvert Large Cap | Sterling Capital vs. Transamerica Large Cap | Sterling Capital vs. Touchstone Large Cap | Sterling Capital vs. Blackrock Large Cap |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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