Correlation Between Sterling Capital and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Aqr Large 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 Aqr Large 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 Aqr Large Cap, you can compare the effects of market volatilities on Sterling Capital and Aqr Large 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 Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Aqr Large.
Diversification Opportunities for Sterling Capital and Aqr Large
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sterling and Aqr is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Mid and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap 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 Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Sterling Capital i.e., Sterling Capital and Aqr Large go up and down completely randomly.
Pair Corralation between Sterling Capital and Aqr Large
Assuming the 90 days horizon Sterling Capital Mid is expected to under-perform the Aqr Large. In addition to that, Sterling Capital is 1.01 times more volatile than Aqr Large Cap. It trades about -0.01 of its total potential returns per unit of risk. Aqr Large Cap is currently generating about 0.07 per unit of volatility. If you would invest 2,074 in Aqr Large Cap on September 14, 2024 and sell it today you would earn a total of 473.00 from holding Aqr Large Cap or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Mid vs. Aqr Large Cap
Performance |
| Timeline |
| Sterling Capital Mid |
| Aqr Large Cap |
Sterling Capital and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Aqr Large
The main advantage of trading using opposite Sterling Capital and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Sterling Capital vs. Aqr Large Cap | Sterling Capital vs. T Rowe Price | Sterling Capital vs. T Rowe Price | Sterling Capital vs. Rational Strategic Allocation |
| Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive | Aqr Large vs. Aqr International Defensive |
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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