Correlation Between Sterling Capital and Midcap Fund
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Midcap Fund 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 Midcap Fund 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 Midcap Fund Class, you can compare the effects of market volatilities on Sterling Capital and Midcap Fund 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 Midcap Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Midcap Fund.
Diversification Opportunities for Sterling Capital and Midcap Fund
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between STERLING and Midcap is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Short and Midcap Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Fund Class 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 Midcap Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Fund Class has no effect on the direction of Sterling Capital i.e., Sterling Capital and Midcap Fund go up and down completely randomly.
Pair Corralation between Sterling Capital and Midcap Fund
Assuming the 90 days horizon Sterling Capital Short is expected to under-perform the Midcap Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sterling Capital Short is 7.9 times less risky than Midcap Fund. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Midcap Fund Class is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,389 in Midcap Fund Class on August 29, 2024 and sell it today you would earn a total of 342.00 from holding Midcap Fund Class or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Sterling Capital Short vs. Midcap Fund Class
Performance |
| Timeline |
| Sterling Capital Short |
| Midcap Fund Class |
Sterling Capital and Midcap Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Midcap Fund
The main advantage of trading using opposite Sterling Capital and Midcap Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Midcap Fund 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 Midcap Fund will offset losses from the drop in Midcap Fund's long position.| Sterling Capital vs. Permanent Portfolio Class | Sterling Capital vs. HUMANA INC | Sterling Capital vs. Aquagold International | Sterling Capital vs. Barloworld Ltd ADR |
| Midcap Fund vs. Sterling Capital Short | Midcap Fund vs. T Rowe Price | Midcap Fund vs. Mirova Global Green | Midcap Fund vs. Ambrus Core Bond |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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