Correlation Between Sterling Capital and Vanguard Growth
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Vanguard Growth 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 Vanguard Growth 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 Vanguard Growth Index, you can compare the effects of market volatilities on Sterling Capital and Vanguard Growth 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 Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Vanguard Growth.
Diversification Opportunities for Sterling Capital and Vanguard Growth
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sterling and Vanguard is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Focus and Vanguard Growth Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Index 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 Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Index has no effect on the direction of Sterling Capital i.e., Sterling Capital and Vanguard Growth go up and down completely randomly.
Pair Corralation between Sterling Capital and Vanguard Growth
Considering the 90-day investment horizon Sterling Capital is expected to generate 1.46 times less return on investment than Vanguard Growth. In addition to that, Sterling Capital is 1.23 times more volatile than Vanguard Growth Index. It trades about 0.07 of its total potential returns per unit of risk. Vanguard Growth Index is currently generating about 0.13 per unit of volatility. If you would invest 22,135 in Vanguard Growth Index on September 3, 2024 and sell it today you would earn a total of 19,152 from holding Vanguard Growth Index or generate 86.52% 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. Vanguard Growth Index
Performance |
| Timeline |
| Sterling Capital Focus |
| Vanguard Growth Index |
Sterling Capital and Vanguard Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Vanguard Growth
The main advantage of trading using opposite Sterling Capital and Vanguard Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Vanguard Growth 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 Vanguard Growth will offset losses from the drop in Vanguard Growth'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 |
| Vanguard Growth vs. Vanguard Value Index | Vanguard Growth vs. Vanguard Information Technology | Vanguard Growth vs. Vanguard Small Cap Growth | Vanguard Growth vs. Vanguard Dividend Appreciation |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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