Correlation Between Sterling Capital and Ab Small
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Ab Small 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 Ab Small 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 Ab Small Cap, you can compare the effects of market volatilities on Sterling Capital and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Ab Small.
Diversification Opportunities for Sterling Capital and Ab Small
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sterling and QUAZX is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Mid and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Sterling Capital i.e., Sterling Capital and Ab Small go up and down completely randomly.
Pair Corralation between Sterling Capital and Ab Small
Assuming the 90 days horizon Sterling Capital Mid is expected to under-perform the Ab Small. In addition to that, Sterling Capital is 2.36 times more volatile than Ab Small Cap. It trades about -0.21 of its total potential returns per unit of risk. Ab Small Cap is currently generating about -0.02 per unit of volatility. If you would invest 7,877 in Ab Small Cap on September 13, 2024 and sell it today you would lose (45.00) from holding Ab Small Cap or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Mid vs. Ab Small Cap
Performance |
| Timeline |
| Sterling Capital Mid |
| Ab Small Cap |
Sterling Capital and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Ab Small
The main advantage of trading using opposite Sterling Capital and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small's long position.| Sterling Capital vs. Fidelity Small Cap | Sterling Capital vs. Boston Partners Small | Sterling Capital vs. Vanguard Small Cap Value | Sterling Capital vs. Ab Discovery Value |
| Ab Small vs. Ab Global E | Ab Small vs. Ab Global E | Ab Small vs. Ab Global E | Ab Small vs. Ab Minnesota Portfolio |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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