Correlation Between Ab Bond and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Ab Bond 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 Bond 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 Bond Inflation and Sterling Capital Securitized, you can compare the effects of market volatilities on Ab Bond 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 Bond with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Sterling Capital.
Diversification Opportunities for Ab Bond and Sterling Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ABNCX and Sterling is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Sterling Capital Securitized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Sec and Ab Bond 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 Bond Inflation 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 Sec has no effect on the direction of Ab Bond i.e., Ab Bond and Sterling Capital go up and down completely randomly.
Pair Corralation between Ab Bond and Sterling Capital
Assuming the 90 days horizon Ab Bond is expected to generate 2.13 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Ab Bond Inflation is 2.08 times less risky than Sterling Capital. It trades about 0.16 of its potential returns per unit of risk. Sterling Capital Securitized is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 894.00 in Sterling Capital Securitized on September 4, 2024 and sell it today you would earn a total of 9.00 from holding Sterling Capital Securitized or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ab Bond Inflation vs. Sterling Capital Securitized
Performance |
| Timeline |
| Ab Bond Inflation |
| Sterling Capital Sec |
Ab Bond and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Sterling Capital
The main advantage of trading using opposite Ab Bond and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond 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 Bond vs. Msift High Yield | Ab Bond vs. American Century High | Ab Bond vs. Prudential High Yield | Ab Bond vs. Pioneer High Yield |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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