Correlation Between Sterling Capital and Alphacentric Lifesci
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Alphacentric Lifesci 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 Alphacentric Lifesci 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 Alphacentric Lifesci Healthcare, you can compare the effects of market volatilities on Sterling Capital and Alphacentric Lifesci 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 Alphacentric Lifesci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Alphacentric Lifesci.
Diversification Opportunities for Sterling Capital and Alphacentric Lifesci
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and Alphacentric is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and Alphacentric Lifesci Healthcar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphacentric Lifesci 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 Alphacentric Lifesci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphacentric Lifesci has no effect on the direction of Sterling Capital i.e., Sterling Capital and Alphacentric Lifesci go up and down completely randomly.
Pair Corralation between Sterling Capital and Alphacentric Lifesci
Assuming the 90 days horizon Sterling Capital Special is expected to generate 0.86 times more return on investment than Alphacentric Lifesci. However, Sterling Capital Special is 1.17 times less risky than Alphacentric Lifesci. It trades about 0.14 of its potential returns per unit of risk. Alphacentric Lifesci Healthcare is currently generating about 0.09 per unit of risk. If you would invest 2,800 in Sterling Capital Special on September 1, 2024 and sell it today you would earn a total of 485.00 from holding Sterling Capital Special or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sterling Capital Special vs. Alphacentric Lifesci Healthcar
Performance |
| Timeline |
| Sterling Capital Special |
| Alphacentric Lifesci |
Sterling Capital and Alphacentric Lifesci Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Alphacentric Lifesci
The main advantage of trading using opposite Sterling Capital and Alphacentric Lifesci positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Alphacentric Lifesci 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 Alphacentric Lifesci will offset losses from the drop in Alphacentric Lifesci's long position.| Sterling Capital vs. Angel Oak Financial | Sterling Capital vs. Blackrock Financial Institutions | Sterling Capital vs. Mesirow Financial Small | Sterling Capital vs. Transamerica Financial Life |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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