Correlation Between Sterling Capital and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Alliancebernstein 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 Alliancebernstein 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 Alliancebernstein Global High, you can compare the effects of market volatilities on Sterling Capital and Alliancebernstein 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 Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Alliancebernstein.
Diversification Opportunities for Sterling Capital and Alliancebernstein
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and Alliancebernstein is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein 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 Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Sterling Capital i.e., Sterling Capital and Alliancebernstein go up and down completely randomly.
Pair Corralation between Sterling Capital and Alliancebernstein
Assuming the 90 days horizon Sterling Capital Special is expected to generate 1.82 times more return on investment than Alliancebernstein. However, Sterling Capital is 1.82 times more volatile than Alliancebernstein Global High. It trades about 0.33 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about 0.2 per unit of risk. If you would invest 3,099 in Sterling Capital Special on September 4, 2024 and sell it today you would earn a total of 201.00 from holding Sterling Capital Special or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Sterling Capital Special vs. Alliancebernstein Global High
Performance |
| Timeline |
| Sterling Capital Special |
| Alliancebernstein |
Sterling Capital and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Alliancebernstein
The main advantage of trading using opposite Sterling Capital and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Sterling Capital vs. Ab Select Equity | Sterling Capital vs. Gmo Global Equity | Sterling Capital vs. Us Strategic Equity | Sterling Capital vs. Us Vector Equity |
| Alliancebernstein vs. Doubleline Yield Opportunities | Alliancebernstein vs. Highland Floating Rate | Alliancebernstein vs. Doubleline Opportunistic Credit | Alliancebernstein vs. Western Asset Emerging |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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