Correlation Between Sterling Capital and Hartford Large
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Hartford 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 Hartford Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Focus and Hartford Large Cap, you can compare the effects of market volatilities on Sterling Capital and Hartford 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 Hartford Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Hartford Large.
Diversification Opportunities for Sterling Capital and Hartford Large
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and Hartford is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Focus and Hartford Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Large Cap 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 Focus are associated (or correlated) with Hartford Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Large Cap has no effect on the direction of Sterling Capital i.e., Sterling Capital and Hartford Large go up and down completely randomly.
Pair Corralation between Sterling Capital and Hartford Large
Considering the 90-day investment horizon Sterling Capital is expected to generate 1.52 times less return on investment than Hartford Large. In addition to that, Sterling Capital is 1.14 times more volatile than Hartford Large Cap. It trades about 0.06 of its total potential returns per unit of risk. Hartford Large Cap is currently generating about 0.11 per unit of volatility. If you would invest 1,255 in Hartford Large Cap on September 3, 2024 and sell it today you would earn a total of 1,077 from holding Hartford Large Cap or generate 85.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Focus vs. Hartford Large Cap
Performance |
| Timeline |
| Sterling Capital Focus |
| Hartford Large Cap |
Sterling Capital and Hartford Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Hartford Large
The main advantage of trading using opposite Sterling Capital and Hartford Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Hartford 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 Hartford Large will offset losses from the drop in Hartford Large's long position.| Sterling Capital vs. Absolute Core Strategy | Sterling Capital vs. iShares ESG Advanced | Sterling Capital vs. PIMCO RAFI Dynamic | Sterling Capital vs. HCM Defender 100 |
| Hartford Large vs. Sterling Capital Focus | Hartford Large vs. Nuveen Growth Opportunities | Hartford Large vs. Grizzle Growth ETF | Hartford Large vs. Nuveen Winslow Large Cap |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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