Correlation Between Sterling Capital and Zacks Dividend
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Zacks Dividend 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 Zacks Dividend 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 Zacks Dividend Fund, you can compare the effects of market volatilities on Sterling Capital and Zacks Dividend 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 Zacks Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Zacks Dividend.
Diversification Opportunities for Sterling Capital and Zacks Dividend
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sterling and Zacks is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Zacks Dividend Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zacks Dividend 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 Zacks Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zacks Dividend has no effect on the direction of Sterling Capital i.e., Sterling Capital and Zacks Dividend go up and down completely randomly.
Pair Corralation between Sterling Capital and Zacks Dividend
Assuming the 90 days horizon Sterling Capital Stratton is expected to generate 1.36 times more return on investment than Zacks Dividend. However, Sterling Capital is 1.36 times more volatile than Zacks Dividend Fund. It trades about 0.04 of its potential returns per unit of risk. Zacks Dividend Fund is currently generating about 0.05 per unit of risk. If you would invest 5,955 in Sterling Capital Stratton on August 30, 2024 and sell it today you would earn a total of 1,167 from holding Sterling Capital Stratton or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Zacks Dividend Fund
Performance |
| Timeline |
| Sterling Capital Stratton |
| Zacks Dividend |
Sterling Capital and Zacks Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Zacks Dividend
The main advantage of trading using opposite Sterling Capital and Zacks Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Zacks Dividend 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 Zacks Dividend will offset losses from the drop in Zacks Dividend's long position.| Sterling Capital vs. Small Cap Equity | Sterling Capital vs. Ab Select Equity | Sterling Capital vs. Vanguard Equity Income | Sterling Capital vs. Fisher Fixed Income |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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