Correlation Between Sterling Capital and Hartford Schroders
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Hartford Schroders 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 Hartford Schroders into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Total and Hartford Schroders Small, you can compare the effects of market volatilities on Sterling Capital and Hartford Schroders 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 Hartford Schroders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Hartford Schroders.
Diversification Opportunities for Sterling Capital and Hartford Schroders
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sterling and Hartford is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Total and Hartford Schroders Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Schroders Small 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 Total are associated (or correlated) with Hartford Schroders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Schroders Small has no effect on the direction of Sterling Capital i.e., Sterling Capital and Hartford Schroders go up and down completely randomly.
Pair Corralation between Sterling Capital and Hartford Schroders
Assuming the 90 days horizon Sterling Capital Total is expected to under-perform the Hartford Schroders. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sterling Capital Total is 5.9 times less risky than Hartford Schroders. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Hartford Schroders Small is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,182 in Hartford Schroders Small on August 26, 2024 and sell it today you would earn a total of 329.00 from holding Hartford Schroders Small or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Total vs. Hartford Schroders Small
Performance |
| Timeline |
| Sterling Capital Total |
| Hartford Schroders Small |
Sterling Capital and Hartford Schroders Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Hartford Schroders
The main advantage of trading using opposite Sterling Capital and Hartford Schroders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Hartford Schroders 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 Hartford Schroders will offset losses from the drop in Hartford Schroders' long position.| Sterling Capital vs. The Hartford Global | Sterling Capital vs. Barings Global Floating | Sterling Capital vs. Scharf Global Opportunity | Sterling Capital vs. T Rowe Price |
| Hartford Schroders vs. Sterling Capital Total | Hartford Schroders vs. Hartford E Equity | Hartford Schroders vs. Hartford Schroders Small | Hartford Schroders vs. Nationwide Highmark Small |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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