Correlation Between Sterling Capital and Sentinel Multi

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

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

Diversification Opportunities for Sterling Capital and Sentinel Multi

0.94

Correlation Coefficient

Sterling Capital  Sentinel Multi

Almost no diversification

The 3 months correlation between Sterling and Sentinel is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Behavioral 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 Behavioral are associated (or correlated) with Sentinel Multi. 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 go up and down completely randomly.

Pair Corralation between Sterling Capital and Sentinel Multi

Assuming the 90 days horizon Sterling Capital is expected to generate 1.3 times less return on investment than Sentinel Multi. In addition to that, Sterling Capital is 1.09 times more volatile than Sentinel Multi Asset Income. It trades about 0.06 of its total potential returns per unit of risk. Sentinel Multi Asset Income is currently generating about 0.09 per unit of volatility. If you would invest  3,896  in Sentinel Multi Asset Income on May 12, 2025 and sell it today you would earn a total of  190.00  from holding Sentinel Multi Asset Income or generate 4.88% return on investment over 90 days.

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

Sterling Capital Behavioral  vs.  Sentinel Multi Asset Income

Sterling Capital Beh

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital Behavioral are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental 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

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Sentinel Multi Asset Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Sentinel Multi 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 Sentinel Multi

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

The idea behind Sterling Capital Behavioral 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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.