Correlation Between Sterling Capital and Live Oak
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Live Oak 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 Live Oak 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 Live Oak Health, you can compare the effects of market volatilities on Sterling Capital and Live Oak 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 Live Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Live Oak.
Diversification Opportunities for Sterling Capital and Live Oak
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and Live is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Mid and Live Oak Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Oak Health 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 Live Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Oak Health has no effect on the direction of Sterling Capital i.e., Sterling Capital and Live Oak go up and down completely randomly.
Pair Corralation between Sterling Capital and Live Oak
Assuming the 90 days horizon Sterling Capital Mid is expected to generate 1.34 times more return on investment than Live Oak. However, Sterling Capital is 1.34 times more volatile than Live Oak Health. It trades about 0.02 of its potential returns per unit of risk. Live Oak Health is currently generating about 0.02 per unit of risk. If you would invest 1,181 in Sterling Capital Mid on September 3, 2024 and sell it today you would earn a total of 104.00 from holding Sterling Capital Mid or generate 8.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Mid vs. Live Oak Health
Performance |
| Timeline |
| Sterling Capital Mid |
| Live Oak Health |
Sterling Capital and Live Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Live Oak
The main advantage of trading using opposite Sterling Capital and Live Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Live Oak 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 Live Oak will offset losses from the drop in Live Oak's long position.| Sterling Capital vs. Dunham Large Cap | Sterling Capital vs. Jhancock Disciplined Value | Sterling Capital vs. Americafirst Large Cap | Sterling Capital vs. Fundamental Large Cap |
| Live Oak vs. Vanguard Health Care | Live Oak vs. Vanguard Health Care | Live Oak vs. T Rowe Price | Live Oak vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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