Correlation Between Wells Fargo and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Large and Sterling Capital Mid, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Sterling Capital.
Diversification Opportunities for Wells Fargo and Sterling Capital
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wells and Sterling is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Large 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 Wells Fargo 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 Wells Fargo Large 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 Wells Fargo i.e., Wells Fargo and Sterling Capital go up and down completely randomly.
Pair Corralation between Wells Fargo and Sterling Capital
Assuming the 90 days horizon Wells Fargo Large is expected to under-perform the Sterling Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Wells Fargo Large is 1.53 times less risky than Sterling Capital. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Sterling Capital Mid is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,638 in Sterling Capital Mid on August 26, 2024 and sell it today you would earn a total of 99.00 from holding Sterling Capital Mid or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wells Fargo Large vs. Sterling Capital Mid
Performance |
| Timeline |
| Wells Fargo Large |
| Sterling Capital Mid |
Wells Fargo and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Sterling Capital
The main advantage of trading using opposite Wells Fargo and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Sterling Capital Equity | Wells Fargo vs. Sterling Capital Behavioral | Wells Fargo vs. Sterling Capital Behavioral | Wells Fargo vs. Sterling Capital Behavioral |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |