Correlation Between Apple and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Apple and Sterling Capital 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 Apple and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Sterling Capital Mid, you can compare the effects of market volatilities on Apple and Sterling Capital 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 Apple with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Sterling Capital.
Diversification Opportunities for Apple and Sterling Capital
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Sterling is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid and Apple 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 Apple Inc are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Mid has no effect on the direction of Apple i.e., Apple and Sterling Capital go up and down completely randomly.
Pair Corralation between Apple and Sterling Capital
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Sterling Capital. In addition to that, Apple is 2.02 times more volatile than Sterling Capital Mid. It trades about -0.39 of its total potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.21 per unit of volatility. If you would invest 1,494 in Sterling Capital Mid on October 23, 2024 and sell it today you would earn a total of 41.00 from holding Sterling Capital Mid or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Sterling Capital Mid
Performance |
| Timeline |
| Apple Inc |
| Sterling Capital Mid |
Apple and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Sterling Capital
The main advantage of trading using opposite Apple and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.The idea behind Apple Inc and Sterling Capital Mid 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.| Sterling Capital vs. Ridgeworth Seix Government | Sterling Capital vs. Lord Abbett Government | Sterling Capital vs. Dws Government Money | Sterling Capital vs. Dreyfus Government Cash |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |