Correlation Between William Blair and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both William Blair 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 William Blair and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between William Blair Large and Sterling Capital Securitized, you can compare the effects of market volatilities on William Blair 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 William Blair with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of William Blair and Sterling Capital.
Diversification Opportunities for William Blair and Sterling Capital
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between William and Sterling is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding William Blair Large and Sterling Capital Securitized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Sec and William Blair 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 William Blair Large 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 Sec has no effect on the direction of William Blair i.e., William Blair and Sterling Capital go up and down completely randomly.
Pair Corralation between William Blair and Sterling Capital
Assuming the 90 days horizon William Blair Large is expected to generate 3.62 times more return on investment than Sterling Capital. However, William Blair is 3.62 times more volatile than Sterling Capital Securitized. It trades about 0.17 of its potential returns per unit of risk. Sterling Capital Securitized is currently generating about -0.1 per unit of risk. If you would invest 2,928 in William Blair Large on September 12, 2024 and sell it today you would earn a total of 306.00 from holding William Blair Large or generate 10.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
William Blair Large vs. Sterling Capital Securitized
Performance |
| Timeline |
| William Blair Large |
| Sterling Capital Sec |
William Blair and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with William Blair and Sterling Capital
The main advantage of trading using opposite William Blair and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if William Blair 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.The idea behind William Blair Large and Sterling Capital Securitized pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sterling Capital vs. Jhancock Global Equity | Sterling Capital vs. Scharf Global Opportunity | Sterling Capital vs. Ab Global Risk | Sterling Capital vs. Artisan Global Unconstrained |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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