Correlation Between Great West and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Great West 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 Great West and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Loomis Sayles and Sterling Capital Mid, you can compare the effects of market volatilities on Great West 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 Great West with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Sterling Capital.
Diversification Opportunities for Great West and Sterling Capital
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great and Sterling is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Great West Loomis Sayles and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid and Great West 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 Great West Loomis Sayles 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 Mid has no effect on the direction of Great West i.e., Great West and Sterling Capital go up and down completely randomly.
Pair Corralation between Great West and Sterling Capital
Assuming the 90 days horizon Great West Loomis Sayles is expected to generate 1.29 times more return on investment than Sterling Capital. However, Great West is 1.29 times more volatile than Sterling Capital Mid. It trades about 0.04 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.03 per unit of risk. If you would invest 3,494 in Great West Loomis Sayles on September 12, 2024 and sell it today you would earn a total of 596.00 from holding Great West Loomis Sayles or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Loomis Sayles vs. Sterling Capital Mid
Performance |
| Timeline |
| Great West Loomis |
| Sterling Capital Mid |
Great West and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Sterling Capital
The main advantage of trading using opposite Great West and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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.| Great West vs. Vanguard Small Cap Value | Great West vs. Vanguard Small Cap Value | Great West vs. Us Small Cap | Great West vs. Us Targeted Value |
| Sterling Capital vs. Valic Company I | Sterling Capital vs. Victory Rs Partners | Sterling Capital vs. Lord Abbett Small | Sterling Capital vs. Great West Loomis Sayles |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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