Correlation Between Ancorathelen Small and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Ancorathelen Small 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 Ancorathelen Small and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ancorathelen Small Mid Cap and Sterling Capital Virginia, you can compare the effects of market volatilities on Ancorathelen Small 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 Ancorathelen Small with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ancorathelen Small and Sterling Capital.
Diversification Opportunities for Ancorathelen Small and Sterling Capital
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ancorathelen and Sterling is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ancorathelen Small Mid Cap and Sterling Capital Virginia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Virginia and Ancorathelen Small 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 Ancorathelen Small Mid Cap 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 Virginia has no effect on the direction of Ancorathelen Small i.e., Ancorathelen Small and Sterling Capital go up and down completely randomly.
Pair Corralation between Ancorathelen Small and Sterling Capital
Assuming the 90 days horizon Ancorathelen Small Mid Cap is expected to generate 7.04 times more return on investment than Sterling Capital. However, Ancorathelen Small is 7.04 times more volatile than Sterling Capital Virginia. It trades about 0.13 of its potential returns per unit of risk. Sterling Capital Virginia is currently generating about 0.13 per unit of risk. If you would invest 1,894 in Ancorathelen Small Mid Cap on September 1, 2024 and sell it today you would earn a total of 380.00 from holding Ancorathelen Small Mid Cap or generate 20.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ancorathelen Small Mid Cap vs. Sterling Capital Virginia
Performance |
| Timeline |
| Ancorathelen Small Mid |
| Sterling Capital Virginia |
Ancorathelen Small and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ancorathelen Small and Sterling Capital
The main advantage of trading using opposite Ancorathelen Small and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ancorathelen Small 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.| Ancorathelen Small vs. Aqr Large Cap | Ancorathelen Small vs. John Hancock Investment | Ancorathelen Small vs. Dodge Cox Stock | Ancorathelen Small vs. M Large Cap |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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