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 Special and Ab Select Equity, 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
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sterling and AUUIX is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity 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 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 Equity 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 Special is expected to generate 1.84 times more return on investment than Ab Select. However, Sterling Capital is 1.84 times more volatile than Ab Select Equity. It trades about 0.05 of its potential returns per unit of risk. Ab Select Equity is currently generating about 0.02 per unit of risk. If you would invest 3,279 in Sterling Capital Special on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Sterling Capital Special or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sterling Capital Special vs. Ab Select Equity
Performance |
| Timeline |
| Sterling Capital Special |
| Ab Select Equity |
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. Dodge International Stock | Sterling Capital vs. Us Strategic Equity | Sterling Capital vs. Rbc Global Equity | Sterling Capital vs. Locorr Dynamic Equity |
| Ab Select vs. Vanguard Total Stock | Ab Select vs. Vanguard 500 Index | Ab Select vs. Vanguard Total Stock | Ab Select vs. Vanguard Total Stock |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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