Correlation Between Sterling Capital and Valic Company
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Valic Company 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 Valic Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Mid and Valic Company I, you can compare the effects of market volatilities on Sterling Capital and Valic Company 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 Valic Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Valic Company.
Diversification Opportunities for Sterling Capital and Valic Company
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sterling and Valic is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Mid and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Mid are associated (or correlated) with Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Sterling Capital i.e., Sterling Capital and Valic Company go up and down completely randomly.
Pair Corralation between Sterling Capital and Valic Company
Assuming the 90 days horizon Sterling Capital is expected to generate 2.76 times less return on investment than Valic Company. But when comparing it to its historical volatility, Sterling Capital Mid is 1.37 times less risky than Valic Company. It trades about 0.03 of its potential returns per unit of risk. Valic Company I is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,119 in Valic Company I on September 12, 2024 and sell it today you would earn a total of 244.00 from holding Valic Company I or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Mid vs. Valic Company I
Performance |
| Timeline |
| Sterling Capital Mid |
| Valic Company I |
Sterling Capital and Valic Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Valic Company
The main advantage of trading using opposite Sterling Capital and Valic Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Valic Company 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 Valic Company will offset losses from the drop in Valic Company's long position.| 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 |
| Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Us Small Cap | Valic Company vs. Us Targeted Value |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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