Correlation Between Sterling Capital and Large Cap
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Large Cap 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 Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Behavioral and Large Cap Growth Profund, you can compare the effects of market volatilities on Sterling Capital and Large Cap 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 Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Large Cap.
Diversification Opportunities for Sterling Capital and Large Cap
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sterling and Large is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Behavioral and Large Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Growth 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 Behavioral are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of Sterling Capital i.e., Sterling Capital and Large Cap go up and down completely randomly.
Pair Corralation between Sterling Capital and Large Cap
Assuming the 90 days horizon Sterling Capital is expected to generate 2.74 times less return on investment than Large Cap. But when comparing it to its historical volatility, Sterling Capital Behavioral is 1.33 times less risky than Large Cap. It trades about 0.05 of its potential returns per unit of risk. Large Cap Growth Profund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,304 in Large Cap Growth Profund on September 12, 2024 and sell it today you would earn a total of 1,331 from holding Large Cap Growth Profund or generate 40.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Behavioral vs. Large Cap Growth Profund
Performance |
| Timeline |
| Sterling Capital Beh |
| Large Cap Growth |
Sterling Capital and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Large Cap
The main advantage of trading using opposite Sterling Capital and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Sterling Capital vs. Large Cap Growth Profund | Sterling Capital vs. Virtus Nfj Large Cap | Sterling Capital vs. Dana Large Cap | Sterling Capital vs. Americafirst Large Cap |
| Large Cap vs. Stone Ridge Diversified | Large Cap vs. Calvert Conservative Allocation | Large Cap vs. Guggenheim Diversified Income | Large Cap vs. Blackrock Conservative Prprdptfinstttnl |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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