Correlation Between Kentucky Tax and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Kentucky Tax 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 Kentucky Tax and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kentucky Tax Free Short To Medium and Sterling Capital Intermediate, you can compare the effects of market volatilities on Kentucky Tax 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 Kentucky Tax with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kentucky Tax and Sterling Capital.
Diversification Opportunities for Kentucky Tax and Sterling Capital
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kentucky and Sterling is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky Tax Free Short To Med and Sterling Capital Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Int and Kentucky Tax 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 Kentucky Tax Free Short To Medium 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 Int has no effect on the direction of Kentucky Tax i.e., Kentucky Tax and Sterling Capital go up and down completely randomly.
Pair Corralation between Kentucky Tax and Sterling Capital
Assuming the 90 days horizon Kentucky Tax is expected to generate 4.54 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Kentucky Tax Free Short To Medium is 2.46 times less risky than Sterling Capital. It trades about 0.12 of its potential returns per unit of risk. Sterling Capital Intermediate is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Sterling Capital Intermediate on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Sterling Capital Intermediate or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Kentucky Tax Free Short To Med vs. Sterling Capital Intermediate
Performance |
| Timeline |
| Kentucky Tax Free |
| Sterling Capital Int |
Kentucky Tax and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kentucky Tax and Sterling Capital
The main advantage of trading using opposite Kentucky Tax and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky Tax 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.| Kentucky Tax vs. North Carolina Tax Free | Kentucky Tax vs. Intermediate Government Bond | Kentucky Tax vs. Tennessee Tax Free Income | Kentucky Tax vs. Mississippi Tax Free Income |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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