Correlation Between Stralem Equity and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Stralem Equity 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 Stralem Equity and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stralem Equity Fund and Sterling Capital Mid, you can compare the effects of market volatilities on Stralem Equity 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 Stralem Equity with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stralem Equity and Sterling Capital.
Diversification Opportunities for Stralem Equity and Sterling Capital
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stralem and Sterling is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Stralem Equity Fund and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid and Stralem Equity 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 Stralem Equity Fund 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 Mid has no effect on the direction of Stralem Equity i.e., Stralem Equity and Sterling Capital go up and down completely randomly.
Pair Corralation between Stralem Equity and Sterling Capital
Assuming the 90 days horizon Stralem Equity Fund is expected to generate 0.83 times more return on investment than Sterling Capital. However, Stralem Equity Fund is 1.2 times less risky than Sterling Capital. It trades about 0.09 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.04 per unit of risk. If you would invest 2,255 in Stralem Equity Fund on August 30, 2024 and sell it today you would earn a total of 975.00 from holding Stralem Equity Fund or generate 43.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stralem Equity Fund vs. Sterling Capital Mid
Performance |
| Timeline |
| Stralem Equity |
| Sterling Capital Mid |
Stralem Equity and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stralem Equity and Sterling Capital
The main advantage of trading using opposite Stralem Equity and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stralem Equity 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.| Stralem Equity vs. Teachers Insurance And | Stralem Equity vs. Virtus Real Estate | Stralem Equity vs. Msif Real Estate | Stralem Equity vs. American Century Global |
| Sterling Capital vs. Fundamental Large Cap | Sterling Capital vs. Dunham Large Cap | Sterling Capital vs. Qs Large Cap | Sterling Capital vs. Dodge Cox Stock |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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