Correlation Between Ab Select and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Select 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 Select Longshort and Sterling Capital Short, you can compare the effects of market volatilities on Ab Select 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 Select with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Sterling Capital.
Diversification Opportunities for Ab Select and Sterling Capital
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between ASCLX and STERLING is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Longshort and Sterling Capital Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Short and Ab Select 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 Select Longshort 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 Short has no effect on the direction of Ab Select i.e., Ab Select and Sterling Capital go up and down completely randomly.
Pair Corralation between Ab Select and Sterling Capital
Assuming the 90 days horizon Ab Select Longshort is expected to generate 6.21 times more return on investment than Sterling Capital. However, Ab Select is 6.21 times more volatile than Sterling Capital Short. It trades about 0.2 of its potential returns per unit of risk. Sterling Capital Short is currently generating about 0.11 per unit of risk. If you would invest 1,369 in Ab Select Longshort on August 29, 2024 and sell it today you would earn a total of 38.00 from holding Ab Select Longshort or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Longshort vs. Sterling Capital Short
Performance |
| Timeline |
| Ab Select Longshort |
| Sterling Capital Short |
Ab Select and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Sterling Capital
The main advantage of trading using opposite Ab Select and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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 Select vs. Neuberger Berman Long | Ab Select vs. Neuberger Berman Long | Ab Select vs. Diamond Hill Long Short | Ab Select vs. Pimco Rae Worldwide |
| Sterling Capital vs. Permanent Portfolio Class | Sterling Capital vs. HUMANA INC | Sterling Capital vs. Aquagold International | Sterling Capital vs. Barloworld Ltd ADR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |