Correlation Between Vy(r) Baron and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Vy(r) Baron 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 Vy(r) Baron and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vy Baron Growth and Sterling Capital Special, you can compare the effects of market volatilities on Vy(r) Baron 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 Vy(r) Baron with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy(r) Baron and Sterling Capital.
Diversification Opportunities for Vy(r) Baron and Sterling Capital
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vy(r) and Sterling is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Vy Baron Growth and Sterling Capital Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Special and Vy(r) Baron 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 Vy Baron Growth 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 Special has no effect on the direction of Vy(r) Baron i.e., Vy(r) Baron and Sterling Capital go up and down completely randomly.
Pair Corralation between Vy(r) Baron and Sterling Capital
Assuming the 90 days horizon Vy Baron Growth is expected to generate 0.31 times more return on investment than Sterling Capital. However, Vy Baron Growth is 3.24 times less risky than Sterling Capital. It trades about -0.27 of its potential returns per unit of risk. Sterling Capital Special is currently generating about -0.27 per unit of risk. If you would invest 2,111 in Vy Baron Growth on October 7, 2024 and sell it today you would lose (105.00) from holding Vy Baron Growth or give up 4.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vy Baron Growth vs. Sterling Capital Special
Performance |
| Timeline |
| Vy Baron Growth |
| Sterling Capital Special |
Vy(r) Baron and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vy(r) Baron and Sterling Capital
The main advantage of trading using opposite Vy(r) Baron and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vy(r) Baron 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.| Vy(r) Baron vs. T Rowe Price | Vy(r) Baron vs. Artisan High Income | Vy(r) Baron vs. Maryland Tax Free Bond | Vy(r) Baron vs. Georgia Tax Free Bond |
| Sterling Capital vs. Rational Defensive Growth | Sterling Capital vs. T Rowe Price | Sterling Capital vs. Calamos Growth Fund | Sterling Capital vs. Mairs Power Growth |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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