Correlation Between Sterling Capital and Baird Strategic
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Baird Strategic 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 Baird Strategic 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 Baird Strategic Municipal, you can compare the effects of market volatilities on Sterling Capital and Baird Strategic 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 Baird Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Baird Strategic.
Diversification Opportunities for Sterling Capital and Baird Strategic
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sterling and Baird is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Baird Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Strategic Municipal 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 Baird Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Strategic Municipal has no effect on the direction of Sterling Capital i.e., Sterling Capital and Baird Strategic go up and down completely randomly.
Pair Corralation between Sterling Capital and Baird Strategic
Assuming the 90 days horizon Sterling Capital Stratton is expected to generate 5.31 times more return on investment than Baird Strategic. However, Sterling Capital is 5.31 times more volatile than Baird Strategic Municipal. It trades about 0.2 of its potential returns per unit of risk. Baird Strategic Municipal is currently generating about 0.15 per unit of risk. If you would invest 6,484 in Sterling Capital Stratton on August 30, 2024 and sell it today you would earn a total of 317.00 from holding Sterling Capital Stratton or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Baird Strategic Municipal
Performance |
| Timeline |
| Sterling Capital Stratton |
| Baird Strategic Municipal |
Sterling Capital and Baird Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Baird Strategic
The main advantage of trading using opposite Sterling Capital and Baird Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Baird Strategic 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 Baird Strategic will offset losses from the drop in Baird Strategic's long position.| Sterling Capital vs. Baird Strategic Municipal | Sterling Capital vs. The Hartford Municipal | Sterling Capital vs. Nebraska Municipal Fund | Sterling Capital vs. Counterpoint Tactical Municipal |
| Baird Strategic vs. Nuveen Minnesota Municipal | Baird Strategic vs. Morningstar Municipal Bond | Baird Strategic vs. Ishares Municipal Bond | Baird Strategic vs. Franklin High Yield |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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