Correlation Between Sterling Capital and Ab Select
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Ab Select 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 Sterling Capital and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Short and Ab Select Longshort, you can compare the effects of market volatilities on Sterling Capital and Ab Select 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 Sterling Capital with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Ab Select.
Diversification Opportunities for Sterling Capital and Ab Select
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between STERLING and ASCLX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort and Sterling Capital 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 Sterling Capital Short are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Sterling Capital i.e., Sterling Capital and Ab Select go up and down completely randomly.
Pair Corralation between Sterling Capital and Ab Select
Assuming the 90 days horizon Sterling Capital is expected to generate 33.58 times less return on investment than Ab Select. But when comparing it to its historical volatility, Sterling Capital Short is 6.86 times less risky than Ab Select. It trades about 0.07 of its potential returns per unit of risk. Ab Select Longshort is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,353 in Ab Select Longshort on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Ab Select Longshort or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Ab Select Longshort
Performance |
| Timeline |
| Sterling Capital Short |
| Ab Select Longshort |
Sterling Capital and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Ab Select
The main advantage of trading using opposite Sterling Capital and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
| Ab Select vs. Pace International Emerging | Ab Select vs. Goldman Sachs Emerging | Ab Select vs. Barings Emerging Markets | Ab Select vs. Artisan Emerging Markets |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |