Correlation Between Baird Strategic and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Baird Strategic and Sterling Capital 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 Baird Strategic and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Strategic Municipal and Sterling Capital Stratton, you can compare the effects of market volatilities on Baird Strategic and Sterling Capital 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 Baird Strategic with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Strategic and Sterling Capital.
Diversification Opportunities for Baird Strategic and Sterling Capital
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Baird and Sterling is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Baird Strategic Municipal and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Baird Strategic 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 Baird Strategic Municipal are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Stratton has no effect on the direction of Baird Strategic i.e., Baird Strategic and Sterling Capital go up and down completely randomly.
Pair Corralation between Baird Strategic and Sterling Capital
Assuming the 90 days horizon Baird Strategic is expected to generate 3.47 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Baird Strategic Municipal is 6.67 times less risky than Sterling Capital. It trades about 0.2 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,053 in Sterling Capital Stratton on September 1, 2024 and sell it today you would earn a total of 757.00 from holding Sterling Capital Stratton or generate 12.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Strategic Municipal vs. Sterling Capital Stratton
Performance |
| Timeline |
| Baird Strategic Municipal |
| Sterling Capital Stratton |
Baird Strategic and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Strategic and Sterling Capital
The main advantage of trading using opposite Baird Strategic and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Strategic position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Baird Strategic vs. Forum Real Estate | Baird Strategic vs. Pender Real Estate | Baird Strategic vs. Prudential Real Estate | Baird Strategic vs. Simt Real Estate |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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