Correlation Between A10 Network and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both A10 Network 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 A10 Network and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between A10 Network and Sterling Capital Behavioral, you can compare the effects of market volatilities on A10 Network 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 A10 Network with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and Sterling Capital.
Diversification Opportunities for A10 Network and Sterling Capital
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between A10 and Sterling is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network and Sterling Capital Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Beh and A10 Network 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 A10 Network 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 Beh has no effect on the direction of A10 Network i.e., A10 Network and Sterling Capital go up and down completely randomly.
Pair Corralation between A10 Network and Sterling Capital
Given the investment horizon of 90 days A10 Network is expected to generate 1.52 times more return on investment than Sterling Capital. However, A10 Network is 1.52 times more volatile than Sterling Capital Behavioral. It trades about 0.21 of its potential returns per unit of risk. Sterling Capital Behavioral is currently generating about -0.1 per unit of risk. If you would invest 1,295 in A10 Network on December 10, 2024 and sell it today you would earn a total of 643.00 from holding A10 Network or generate 49.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.42% |
| Values | Daily Returns |
A10 Network vs. Sterling Capital Behavioral
Performance |
| Timeline |
| A10 Network |
| Sterling Capital Beh |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
A10 Network and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with A10 Network and Sterling Capital
The main advantage of trading using opposite A10 Network and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network 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.| A10 Network vs. Evertec | ||
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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