Correlation Between Sterling Capital and Delaware Tax-free
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Delaware Tax-free 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 Delaware Tax-free 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 Delaware Tax Free New, you can compare the effects of market volatilities on Sterling Capital and Delaware Tax-free 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 Delaware Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Delaware Tax-free.
Diversification Opportunities for Sterling Capital and Delaware Tax-free
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and Delaware is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Delaware Tax Free New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Tax Free 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 Delaware Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Tax Free has no effect on the direction of Sterling Capital i.e., Sterling Capital and Delaware Tax-free go up and down completely randomly.
Pair Corralation between Sterling Capital and Delaware Tax-free
Assuming the 90 days horizon Sterling Capital is expected to generate 12.75 times less return on investment than Delaware Tax-free. But when comparing it to its historical volatility, Sterling Capital Short is 4.54 times less risky than Delaware Tax-free. It trades about 0.06 of its potential returns per unit of risk. Delaware Tax Free New is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,066 in Delaware Tax Free New on September 1, 2024 and sell it today you would earn a total of 17.00 from holding Delaware Tax Free New or generate 1.59% 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. Delaware Tax Free New
Performance |
| Timeline |
| Sterling Capital Short |
| Delaware Tax Free |
Sterling Capital and Delaware Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Delaware Tax-free
The main advantage of trading using opposite Sterling Capital and Delaware Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Delaware Tax-free 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 Delaware Tax-free will offset losses from the drop in Delaware Tax-free'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 |
| Delaware Tax-free vs. Optimum Small Mid Cap | Delaware Tax-free vs. Optimum Small Mid Cap | Delaware Tax-free vs. Ivy Apollo Multi Asset | Delaware Tax-free vs. Optimum Fixed Income |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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