Correlation Between Sterling Capital and Clearbridge Small
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Clearbridge Small 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 Clearbridge Small 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 Clearbridge Small Cap, you can compare the effects of market volatilities on Sterling Capital and Clearbridge Small 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 Clearbridge Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Clearbridge Small.
Diversification Opportunities for Sterling Capital and Clearbridge Small
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sterling and Clearbridge is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Clearbridge Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Small Cap 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 Clearbridge Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Small Cap has no effect on the direction of Sterling Capital i.e., Sterling Capital and Clearbridge Small go up and down completely randomly.
Pair Corralation between Sterling Capital and Clearbridge Small
Assuming the 90 days horizon Sterling Capital Stratton is expected to generate 0.7 times more return on investment than Clearbridge Small. However, Sterling Capital Stratton is 1.43 times less risky than Clearbridge Small. It trades about 0.17 of its potential returns per unit of risk. Clearbridge Small Cap is currently generating about 0.11 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Clearbridge Small Cap
Performance |
| Timeline |
| Sterling Capital Stratton |
| Clearbridge Small Cap |
Sterling Capital and Clearbridge Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Clearbridge Small
The main advantage of trading using opposite Sterling Capital and Clearbridge Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Clearbridge Small 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 Clearbridge Small will offset losses from the drop in Clearbridge Small'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 |
| Clearbridge Small vs. Small Midcap Dividend Income | Clearbridge Small vs. Kinetics Small Cap | Clearbridge Small vs. Legg Mason Partners | Clearbridge Small vs. Vanguard Growth And |
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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