Correlation Between Sterling Capital and The National
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and The National 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 The National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital South and The National Tax Free, you can compare the effects of market volatilities on Sterling Capital and The National 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 The National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and The National.
Diversification Opportunities for Sterling Capital and The National
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Sterling and The is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital South and The National Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Tax 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 South are associated (or correlated) with The National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Tax has no effect on the direction of Sterling Capital i.e., Sterling Capital and The National go up and down completely randomly.
Pair Corralation between Sterling Capital and The National
Assuming the 90 days horizon Sterling Capital is expected to generate 1.25 times less return on investment than The National. But when comparing it to its historical volatility, Sterling Capital South is 1.25 times less risky than The National. It trades about 0.2 of its potential returns per unit of risk. The National Tax Free is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,861 in The National Tax Free on September 4, 2024 and sell it today you would earn a total of 20.00 from holding The National Tax Free or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital South vs. The National Tax Free
Performance |
| Timeline |
| Sterling Capital South |
| National Tax |
Sterling Capital and The National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and The National
The main advantage of trading using opposite Sterling Capital and The National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, The National 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 The National will offset losses from the drop in The National's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
| The National vs. The Missouri Tax Free | The National vs. High Yield Municipal Fund | The National vs. Aquagold International | The National vs. Morningstar Unconstrained Allocation |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |