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 Porate, 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
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Growth and Sterling is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and Sterling Capital Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Porate 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 Porate 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 1.25 times more return on investment than Sterling Capital. However, Growth Fund is 1.25 times more volatile than Sterling Capital Porate. It trades about 0.16 of its potential returns per unit of risk. Sterling Capital Porate is currently generating about 0.09 per unit of risk. If you would invest 7,826 in Growth Fund Of on August 30, 2024 and sell it today you would earn a total of 266.00 from holding Growth Fund Of or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Fund Of vs. Sterling Capital Porate
Performance |
| Timeline |
| Growth Fund |
| Sterling Capital Porate |
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. Old Westbury Short Term | Growth Fund vs. Franklin Federal Limited Term | Growth Fund vs. Rbc Short Duration | Growth Fund vs. Aqr Long Short Equity |
| Sterling Capital vs. Absolute Convertible Arbitrage | Sterling Capital vs. Rationalpier 88 Convertible | Sterling Capital vs. Gabelli Convertible And | Sterling Capital vs. Advent Claymore Convertible |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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