Correlation Between NYSE Composite and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Sterling Capital Mid, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Sterling Capital.
Diversification Opportunities for NYSE Composite and Sterling Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Sterling is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Sterling Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Sterling Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.61 times more return on investment than Sterling Capital. However, NYSE Composite is 1.65 times less risky than Sterling Capital. It trades about -0.07 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about -0.04 per unit of risk. If you would invest 2,001,587 in NYSE Composite on September 12, 2024 and sell it today you would lose (13,397) from holding NYSE Composite or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Sterling Capital Mid
Performance |
| Timeline |
NYSE Composite and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Sterling Capital Mid
Pair trading matchups for Sterling Capital
Pair Trading with NYSE Composite and Sterling Capital
The main advantage of trading using opposite NYSE Composite and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |