Correlation Between Sterling Capital and Franklin High
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Franklin High 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 Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Mid and Franklin High Yield, you can compare the effects of market volatilities on Sterling Capital and Franklin High 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 Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Franklin High.
Diversification Opportunities for Sterling Capital and Franklin High
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sterling and Franklin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Mid and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield 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 Mid are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Sterling Capital i.e., Sterling Capital and Franklin High go up and down completely randomly.
Pair Corralation between Sterling Capital and Franklin High
Assuming the 90 days horizon Sterling Capital Mid is expected to generate 3.21 times more return on investment than Franklin High. However, Sterling Capital is 3.21 times more volatile than Franklin High Yield. It trades about 0.04 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.08 per unit of risk. If you would invest 1,464 in Sterling Capital Mid on August 30, 2024 and sell it today you would earn a total of 290.00 from holding Sterling Capital Mid or generate 19.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Mid vs. Franklin High Yield
Performance |
| Timeline |
| Sterling Capital Mid |
| Franklin High Yield |
Sterling Capital and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Franklin High
The main advantage of trading using opposite Sterling Capital and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Franklin High 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 Franklin High will offset losses from the drop in Franklin High's long position.| Sterling Capital vs. Fundamental Large Cap | Sterling Capital vs. Dunham Large Cap | Sterling Capital vs. Qs Large Cap | Sterling Capital vs. Dodge Cox Stock |
| Franklin High vs. Pgim Jennison Technology | Franklin High vs. Allianzgi Technology Fund | Franklin High vs. Hennessy Technology Fund | Franklin High vs. Invesco Technology Fund |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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