Correlation Between Sterling Capital and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Voya Bond 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 Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Short and Voya Bond Index, you can compare the effects of market volatilities on Sterling Capital and Voya Bond 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 Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Voya Bond.
Diversification Opportunities for Sterling Capital and Voya Bond
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sterling and Voya is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index 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 Short are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Sterling Capital i.e., Sterling Capital and Voya Bond go up and down completely randomly.
Pair Corralation between Sterling Capital and Voya Bond
Assuming the 90 days horizon Sterling Capital Short is expected to generate 0.39 times more return on investment than Voya Bond. However, Sterling Capital Short is 2.57 times less risky than Voya Bond. It trades about 0.08 of its potential returns per unit of risk. Voya Bond Index is currently generating about -0.12 per unit of risk. If you would invest 832.00 in Sterling Capital Short on September 12, 2024 and sell it today you would earn a total of 5.00 from holding Sterling Capital Short or generate 0.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.44% |
Values | Daily Returns |
Sterling Capital Short vs. Voya Bond Index
Performance |
Timeline |
Sterling Capital Short |
Voya Bond Index |
Sterling Capital and Voya Bond Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sterling Capital and Voya Bond
The main advantage of trading using opposite Sterling Capital and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Voya Bond 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 Voya Bond will offset losses from the drop in Voya Bond's long position.Sterling Capital vs. Goldman Sachs Real | Sterling Capital vs. Guggenheim Risk Managed | Sterling Capital vs. Redwood Real Estate | Sterling Capital vs. Sa Real Estate |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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