Correlation Between Sterling Capital and Principal Fds

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

By analyzing existing cross correlation between Sterling Capital Stratton and Principal Fds Money, you can compare the effects of market volatilities on Sterling Capital and Principal Fds 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 Principal Fds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Principal Fds.

Diversification Opportunities for Sterling Capital and Principal Fds

-0.21

Correlation Coefficient

Sterling Capital  Principal Fds

Very good diversification

The 3 months correlation between Sterling and Principal is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Principal Fds Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Principal Fds Money 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 Stratton are associated (or correlated) with Principal Fds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Principal Fds Money has no effect on the direction of Sterling Capital i.e., Sterling Capital and Principal Fds go up and down completely randomly.

Pair Corralation between Sterling Capital and Principal Fds

If you would invest  100.00  in Principal Fds Money on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Principal Fds Money or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Sterling Capital Stratton  vs.  Principal Fds Money

Sterling Capital Stratton

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Principal Fds Money

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Principal Fds Money are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Principal Fds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sterling Capital and Principal Fds

The main advantage of trading using opposite Sterling Capital and Principal Fds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Principal Fds 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 Principal Fds will offset losses from the drop in Principal Fds' long position.

The idea behind Sterling Capital Stratton and Principal Fds Money 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.