Correlation Between Sterling Capital and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Ab Bond 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 Bond 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 Ab Bond Inflation, you can compare the effects of market volatilities on Sterling Capital and Ab Bond 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 Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Ab Bond.
Diversification Opportunities for Sterling Capital and Ab Bond
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sterling and ABNCX is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation 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 Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Sterling Capital i.e., Sterling Capital and Ab Bond go up and down completely randomly.
Pair Corralation between Sterling Capital and Ab Bond
Assuming the 90 days horizon Sterling Capital Special is expected to generate 4.32 times more return on investment than Ab Bond. However, Sterling Capital is 4.32 times more volatile than Ab Bond Inflation. It trades about 0.04 of its potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.07 per unit of risk. If you would invest 2,826 in Sterling Capital Special on September 2, 2024 and sell it today you would earn a total of 459.00 from holding Sterling Capital Special or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Special vs. Ab Bond Inflation
Performance |
| Timeline |
| Sterling Capital Special |
| Ab Bond Inflation |
Sterling Capital and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Ab Bond
The main advantage of trading using opposite Sterling Capital and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Ab Bond 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 Bond will offset losses from the drop in Ab Bond's long position.| Sterling Capital vs. Inverse Government Long | Sterling Capital vs. Virtus Seix Government | Sterling Capital vs. Us Government Securities | Sterling Capital vs. Goldman Sachs Government |
| Ab Bond vs. T Rowe Price | Ab Bond vs. Dws Government Money | Ab Bond vs. American Century Investment | Ab Bond vs. Aim Investment Secs |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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