Correlation Between Prudential Health and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Prudential Health 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 Prudential Health and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Health Sciences and Sterling Capital Stratton, you can compare the effects of market volatilities on Prudential Health 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 Prudential Health with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Health and Sterling Capital.
Diversification Opportunities for Prudential Health and Sterling Capital
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prudential and Sterling is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Prudential Health Sciences and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Prudential Health 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 Prudential Health Sciences 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 Stratton has no effect on the direction of Prudential Health i.e., Prudential Health and Sterling Capital go up and down completely randomly.
Pair Corralation between Prudential Health and Sterling Capital
Assuming the 90 days horizon Prudential Health Sciences is expected to under-perform the Sterling Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Prudential Health Sciences is 1.3 times less risky than Sterling Capital. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Sterling Capital Stratton is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4,947 in Sterling Capital Stratton on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Sterling Capital Stratton or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prudential Health Sciences vs. Sterling Capital Stratton
Performance |
| Timeline |
| Prudential Health |
| Sterling Capital Stratton |
Prudential Health and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prudential Health and Sterling Capital
The main advantage of trading using opposite Prudential Health and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Health 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.| Prudential Health vs. Fidelity Advisor Technology | Prudential Health vs. Fidelity Advisor Biotechnology | Prudential Health vs. Fidelity Advisor Financial | Prudential Health vs. Fidelity Advisor Utilities |
| Sterling Capital vs. Dodge Cox Emerging | Sterling Capital vs. T Rowe Price | Sterling Capital vs. Barings Emerging Markets | Sterling Capital 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |