Correlation Between Sterling Capital and Jpmorgan Equity
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Jpmorgan Equity 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 Jpmorgan Equity 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 Jpmorgan Equity Fund, you can compare the effects of market volatilities on Sterling Capital and Jpmorgan Equity 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 Jpmorgan Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Jpmorgan Equity.
Diversification Opportunities for Sterling Capital and Jpmorgan Equity
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sterling and Jpmorgan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Jpmorgan Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Equity 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 Jpmorgan Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Equity has no effect on the direction of Sterling Capital i.e., Sterling Capital and Jpmorgan Equity go up and down completely randomly.
Pair Corralation between Sterling Capital and Jpmorgan Equity
Assuming the 90 days horizon Sterling Capital is expected to generate 1.81 times less return on investment than Jpmorgan Equity. In addition to that, Sterling Capital is 1.34 times more volatile than Jpmorgan Equity Fund. It trades about 0.05 of its total potential returns per unit of risk. Jpmorgan Equity Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,829 in Jpmorgan Equity Fund on September 2, 2024 and sell it today you would earn a total of 740.00 from holding Jpmorgan Equity Fund or generate 40.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Jpmorgan Equity Fund
Performance |
| Timeline |
| Sterling Capital Stratton |
| Jpmorgan Equity |
Sterling Capital and Jpmorgan Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Jpmorgan Equity
The main advantage of trading using opposite Sterling Capital and Jpmorgan Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Jpmorgan Equity 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 Jpmorgan Equity will offset losses from the drop in Jpmorgan Equity's long position.| Sterling Capital vs. Alpine Realty Income | Sterling Capital vs. Davis Real Estate | Sterling Capital vs. Sterling Capital Stratton | Sterling Capital vs. State Street Institutional |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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