Correlation Between Firsthand Alternative and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative 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 Firsthand Alternative and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Sterling Capital Special, you can compare the effects of market volatilities on Firsthand Alternative 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 Firsthand Alternative with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Sterling Capital.
Diversification Opportunities for Firsthand Alternative and Sterling Capital
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Firsthand and Sterling is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Sterling Capital Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Special and Firsthand Alternative 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 Firsthand Alternative Energy 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 Special has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Sterling Capital go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Sterling Capital
Assuming the 90 days horizon Firsthand Alternative is expected to generate 2.32 times less return on investment than Sterling Capital. In addition to that, Firsthand Alternative is 1.55 times more volatile than Sterling Capital Special. It trades about 0.08 of its total potential returns per unit of risk. Sterling Capital Special is currently generating about 0.3 per unit of volatility. If you would invest 2,810 in Sterling Capital Special on September 2, 2024 and sell it today you would earn a total of 164.00 from holding Sterling Capital Special or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Sterling Capital Special
Performance |
| Timeline |
| Firsthand Alternative |
| Sterling Capital Special |
Firsthand Alternative and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Sterling Capital
The main advantage of trading using opposite Firsthand Alternative and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative 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 Firsthand Alternative Energy and Sterling Capital Special 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. Alger Health Sciences | Sterling Capital vs. Blackrock Health Sciences | Sterling Capital vs. Delaware Healthcare Fund | Sterling Capital vs. Tekla Healthcare Opportunities |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |