Correlation Between Ab High and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Ab High 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 High 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 High Income and Sterling Capital Porate, you can compare the effects of market volatilities on Ab High 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 High with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab High and Sterling Capital.
Diversification Opportunities for Ab High and Sterling Capital
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AGDAX and Sterling is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ab High Income and Sterling Capital Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Porate and Ab High 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 High Income 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 Porate has no effect on the direction of Ab High i.e., Ab High and Sterling Capital go up and down completely randomly.
Pair Corralation between Ab High and Sterling Capital
Assuming the 90 days horizon Ab High Income is expected to generate 0.29 times more return on investment than Sterling Capital. However, Ab High Income is 3.4 times less risky than Sterling Capital. It trades about 0.23 of its potential returns per unit of risk. Sterling Capital Porate is currently generating about 0.06 per unit of risk. If you would invest 668.00 in Ab High Income on September 1, 2024 and sell it today you would earn a total of 37.00 from holding Ab High Income or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Ab High Income vs. Sterling Capital Porate
Performance |
| Timeline |
| Ab High Income |
| Sterling Capital Porate |
Ab High and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab High and Sterling Capital
The main advantage of trading using opposite Ab High and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab High 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 High vs. Ab Global E | Ab High vs. Ab Global E | Ab High vs. Ab Global E | Ab High vs. Ab Minnesota Portfolio |
| 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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