Correlation Between Sterling Capital and Alger Health
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Alger Health 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 Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Special and Alger Health Sciences, you can compare the effects of market volatilities on Sterling Capital and Alger Health 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 Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Alger Health.
Diversification Opportunities for Sterling Capital and Alger Health
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sterling and Alger is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences 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 Special are associated (or correlated) with Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of Sterling Capital i.e., Sterling Capital and Alger Health go up and down completely randomly.
Pair Corralation between Sterling Capital and Alger Health
Assuming the 90 days horizon Sterling Capital Special is expected to generate 1.48 times more return on investment than Alger Health. However, Sterling Capital is 1.48 times more volatile than Alger Health Sciences. It trades about -0.08 of its potential returns per unit of risk. Alger Health Sciences is currently generating about -0.17 per unit of risk. If you would invest 2,443 in Sterling Capital Special on January 13, 2025 and sell it today you would lose (258.00) from holding Sterling Capital Special or give up 10.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Special vs. Alger Health Sciences
Performance |
| Timeline |
| Sterling Capital Special |
| Alger Health Sciences |
Sterling Capital and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Alger Health
The main advantage of trading using opposite Sterling Capital and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Alger Health 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 Alger Health will offset losses from the drop in Alger Health's long position.| Sterling Capital vs. Transamerica Mlp Energy | Sterling Capital vs. Global Resources Fund | Sterling Capital vs. Calvert Global Energy | Sterling Capital vs. Blackrock All Cap Energy |
| Alger Health vs. Alger Midcap Growth | Alger Health vs. Alger Midcap Growth | Alger Health vs. Alger Mid Cap | Alger Health vs. Alger Small Cap |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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