Correlation Between Sterling Capital and Sentinel Multi-asset

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

By analyzing existing cross correlation between Sterling Capital North and Sentinel Multi Asset Income, you can compare the effects of market volatilities on Sterling Capital and Sentinel Multi-asset 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 Sentinel Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Sentinel Multi-asset.

Diversification Opportunities for Sterling Capital and Sentinel Multi-asset

0.71

Correlation Coefficient

Sterling Capital  Sentinel Multi-asset

Poor diversification

The 3 months correlation between Sterling and Sentinel is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital North and Sentinel Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentinel Multi Asset 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 North are associated (or correlated) with Sentinel Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentinel Multi Asset has no effect on the direction of Sterling Capital i.e., Sterling Capital and Sentinel Multi-asset go up and down completely randomly.

Pair Corralation between Sterling Capital and Sentinel Multi-asset

Assuming the 90 days horizon Sterling Capital is expected to generate 11.75 times less return on investment than Sentinel Multi-asset. But when comparing it to its historical volatility, Sterling Capital North is 9.13 times less risky than Sentinel Multi-asset. It trades about 0.18 of its potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  3,592  in Sentinel Multi Asset Income on April 25, 2025 and sell it today you would earn a total of  538.00  from holding Sentinel Multi Asset Income or generate 14.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sterling Capital North  vs.  Sentinel Multi Asset Income

Sterling Capital North

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital North are ranked lower than 14 (%) 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.

Sentinel Multi Asset

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sentinel Multi Asset Income are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Sentinel Multi-asset showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sterling Capital and Sentinel Multi-asset

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

The idea behind Sterling Capital North and Sentinel Multi Asset Income 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.