Correlation Between Sterling Capital and Ab New
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Ab New 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 New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Short and Ab New Jersey, you can compare the effects of market volatilities on Sterling Capital and Ab New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Ab New.
Diversification Opportunities for Sterling Capital and Ab New
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and ANJCX is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Ab New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab New Jersey 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 Short are associated (or correlated) with Ab New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab New Jersey has no effect on the direction of Sterling Capital i.e., Sterling Capital and Ab New go up and down completely randomly.
Pair Corralation between Sterling Capital and Ab New
Assuming the 90 days horizon Sterling Capital is expected to generate 10.47 times less return on investment than Ab New. But when comparing it to its historical volatility, Sterling Capital Short is 3.2 times less risky than Ab New. It trades about 0.06 of its potential returns per unit of risk. Ab New Jersey is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 914.00 in Ab New Jersey on September 1, 2024 and sell it today you would earn a total of 12.00 from holding Ab New Jersey or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sterling Capital Short vs. Ab New Jersey
Performance |
| Timeline |
| Sterling Capital Short |
| Ab New Jersey |
Sterling Capital and Ab New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Ab New
The main advantage of trading using opposite Sterling Capital and Ab New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Ab New 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 New will offset losses from the drop in Ab New's long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| CEOs Directory Screen CEOs from public companies around the world |