Correlation Between Sterling Capital and NetObjects

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

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

Diversification Opportunities for Sterling Capital and NetObjects

0.0

Correlation Coefficient

Sterling Capital  NetObjects

Pay attention - limited upside

The 3 months correlation between Sterling and NetObjects is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Focus and NetObjects in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetObjects 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 Focus are associated (or correlated) with NetObjects. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetObjects has no effect on the direction of Sterling Capital i.e., Sterling Capital and NetObjects go up and down completely randomly.

Pair Corralation between Sterling Capital and NetObjects

If you would invest  2,474  in Sterling Capital Focus on February 7, 2025 and sell it today you would earn a total of  466.00  from holding Sterling Capital Focus or generate 18.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sterling Capital Focus  vs.  NetObjects

Sterling Capital Focus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sterling Capital Focus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Sterling Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

NetObjects

Risk-Adjusted Performance

Very Weak

Over the last 90 days NetObjects has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, NetObjects is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sterling Capital and NetObjects

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

The idea behind Sterling Capital Focus and NetObjects 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 CEOs Directory module to screen CEOs from public companies around the world.