Correlation Between Sterling Capital and American Century
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Stratton and American Century One, you can compare the effects of market volatilities on Sterling Capital and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and American Century.
Diversification Opportunities for Sterling Capital and American Century
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sterling and American is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and American Century One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century One 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 Stratton are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century One has no effect on the direction of Sterling Capital i.e., Sterling Capital and American Century go up and down completely randomly.
Pair Corralation between Sterling Capital and American Century
Assuming the 90 days horizon Sterling Capital Stratton is expected to generate 1.2 times more return on investment than American Century. However, Sterling Capital is 1.2 times more volatile than American Century One. It trades about 0.17 of its potential returns per unit of risk. American Century One is currently generating about 0.12 per unit of risk. If you would invest 3,374 in Sterling Capital Stratton on September 1, 2024 and sell it today you would earn a total of 678.00 from holding Sterling Capital Stratton or generate 20.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sterling Capital Stratton vs. American Century One
Performance |
| Timeline |
| Sterling Capital Stratton |
| American Century One |
Sterling Capital and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and American Century
The main advantage of trading using opposite Sterling Capital and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Sterling Capital vs. Realty Income | Sterling Capital vs. Dynex Capital | Sterling Capital vs. First Industrial Realty | Sterling Capital vs. Healthcare Realty Trust |
| American Century vs. Jpmorgan Trust I | American Century vs. Pimco Funds | American Century vs. Franklin Government Money | American Century 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.
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