Correlation Between Sterling Capital and Fidelity Advisor
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor Stock, you can compare the effects of market volatilities on Sterling Capital and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Fidelity Advisor.
Diversification Opportunities for Sterling Capital and Fidelity Advisor
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and Fidelity is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Fidelity Advisor Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Stock 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Stock has no effect on the direction of Sterling Capital i.e., Sterling Capital and Fidelity Advisor go up and down completely randomly.
Pair Corralation between Sterling Capital and Fidelity Advisor
Assuming the 90 days horizon Sterling Capital is expected to generate 1.33 times less return on investment than Fidelity Advisor. But when comparing it to its historical volatility, Sterling Capital Short is 10.59 times less risky than Fidelity Advisor. It trades about 0.22 of its potential returns per unit of risk. Fidelity Advisor Stock is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,908 in Fidelity Advisor Stock on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Fidelity Advisor Stock or generate 0.41% 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. Fidelity Advisor Stock
Performance |
| Timeline |
| Sterling Capital Short |
| Fidelity Advisor Stock |
Sterling Capital and Fidelity Advisor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Fidelity Advisor
The main advantage of trading using opposite Sterling Capital and Fidelity Advisor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Fidelity Advisor 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 Fidelity Advisor will offset losses from the drop in Fidelity Advisor's long position.| Sterling Capital vs. Mesirow Financial Small | Sterling Capital vs. Davis Financial Fund | Sterling Capital vs. Fidelity Advisor Financial | Sterling Capital vs. Financials Ultrasector Profund |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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