Correlation Between Ab Impact and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Ab Impact 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 Ab Impact and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Sterling Capital Stratton, you can compare the effects of market volatilities on Ab Impact 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 Ab Impact with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Sterling Capital.
Diversification Opportunities for Ab Impact and Sterling Capital
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABIMX and Sterling is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Ab Impact 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 Ab Impact Municipal 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 Stratton has no effect on the direction of Ab Impact i.e., Ab Impact and Sterling Capital go up and down completely randomly.
Pair Corralation between Ab Impact and Sterling Capital
Assuming the 90 days horizon Ab Impact is expected to generate 1.53 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Ab Impact Municipal is 3.22 times less risky than Sterling Capital. It trades about 0.08 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,035 in Sterling Capital Stratton on September 2, 2024 and sell it today you would earn a total of 1,097 from holding Sterling Capital Stratton or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Impact Municipal vs. Sterling Capital Stratton
Performance |
| Timeline |
| Ab Impact Municipal |
| Sterling Capital Stratton |
Ab Impact and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Sterling Capital
The main advantage of trading using opposite Ab Impact and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact 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.| Ab Impact vs. Angel Oak Ultrashort | Ab Impact vs. Ab Select Longshort | Ab Impact vs. Chartwell Short Duration | Ab Impact vs. Touchstone Ultra Short |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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