Correlation Between Sterling Capital and Pace Large
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Pace Large 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 Pace Large 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 Pace Large Value, you can compare the effects of market volatilities on Sterling Capital and Pace Large 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 Pace Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Pace Large.
Diversification Opportunities for Sterling Capital and Pace Large
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sterling and Pace is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Pace Large Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Large Value 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 Pace Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Large Value has no effect on the direction of Sterling Capital i.e., Sterling Capital and Pace Large go up and down completely randomly.
Pair Corralation between Sterling Capital and Pace Large
Assuming the 90 days horizon Sterling Capital is expected to generate 42.28 times less return on investment than Pace Large. But when comparing it to its historical volatility, Sterling Capital Short is 9.18 times less risky than Pace Large. It trades about 0.06 of its potential returns per unit of risk. Pace Large Value is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,228 in Pace Large Value on September 1, 2024 and sell it today you would earn a total of 114.00 from holding Pace Large Value or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Short vs. Pace Large Value
Performance |
| Timeline |
| Sterling Capital Short |
| Pace Large Value |
Sterling Capital and Pace Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Pace Large
The main advantage of trading using opposite Sterling Capital and Pace Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Pace Large 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 Pace Large will offset losses from the drop in Pace Large'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 |
| Pace Large vs. Principal Lifetime Hybrid | Pace Large vs. Touchstone Large Cap | Pace Large vs. Tax Managed Large Cap | Pace Large vs. Federated Kaufmann Large |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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