Correlation Between Growth Fund and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Growth Fund 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 Growth Fund and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and Sterling Capital Behavioral, you can compare the effects of market volatilities on Growth Fund 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 Growth Fund with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and Sterling Capital.
Diversification Opportunities for Growth Fund and Sterling Capital
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Growth and Sterling is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Sterling Capital Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Beh and Growth Fund 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 Growth Fund Of 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 Beh has no effect on the direction of Growth Fund i.e., Growth Fund and Sterling Capital go up and down completely randomly.
Pair Corralation between Growth Fund and Sterling Capital
Assuming the 90 days horizon Growth Fund Of is expected to generate 1.4 times more return on investment than Sterling Capital. However, Growth Fund is 1.4 times more volatile than Sterling Capital Behavioral. It trades about -0.03 of its potential returns per unit of risk. Sterling Capital Behavioral is currently generating about -0.1 per unit of risk. If you would invest 6,534 in Growth Fund Of on December 10, 2024 and sell it today you would lose (430.00) from holding Growth Fund Of or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 76.42% |
| Values | Daily Returns |
Growth Fund Of vs. Sterling Capital Behavioral
Performance |
| Timeline |
| Growth Fund |
| Sterling Capital Beh |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Growth Fund and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and Sterling Capital
The main advantage of trading using opposite Growth Fund and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund 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.| Growth Fund vs. Europacific Growth Fund | ||
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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