Correlation Between Aquagold International and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Aquagold International 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 Aquagold International and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Sterling Capital Stratton, you can compare the effects of market volatilities on Aquagold International 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 Aquagold International with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Sterling Capital.
Diversification Opportunities for Aquagold International and Sterling Capital
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aquagold and Sterling is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International 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 Aquagold International 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 Aquagold International 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 Aquagold International i.e., Aquagold International and Sterling Capital go up and down completely randomly.
Pair Corralation between Aquagold International and Sterling Capital
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Sterling Capital. In addition to that, Aquagold International is 13.27 times more volatile than Sterling Capital Stratton. It trades about -0.22 of its total potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.07 per unit of volatility. If you would invest 3,596 in Sterling Capital Stratton on November 27, 2024 and sell it today you would earn a total of 37.00 from holding Sterling Capital Stratton or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aquagold International vs. Sterling Capital Stratton
Performance |
| Timeline |
| Aquagold International |
| Sterling Capital Stratton |
Aquagold International and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Sterling Capital
The main advantage of trading using opposite Aquagold International and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International 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.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Sterling Capital vs. Columbia Real Estate | Sterling Capital vs. Alpine Realty Income | Sterling Capital vs. Davis Real Estate | Sterling Capital vs. Sterling Capital Stratton |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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