Correlation Between Sterling Capital and Ab Value
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Ab Value 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 Ab Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Special and Ab Value Fund, you can compare the effects of market volatilities on Sterling Capital and Ab Value 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 Ab Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Ab Value.
Diversification Opportunities for Sterling Capital and Ab Value
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sterling and ABVCX is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Special and Ab Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Value Fund 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 Special are associated (or correlated) with Ab Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Value Fund has no effect on the direction of Sterling Capital i.e., Sterling Capital and Ab Value go up and down completely randomly.
Pair Corralation between Sterling Capital and Ab Value
Assuming the 90 days horizon Sterling Capital is expected to generate 1.32 times less return on investment than Ab Value. In addition to that, Sterling Capital is 1.41 times more volatile than Ab Value Fund. It trades about 0.05 of its total potential returns per unit of risk. Ab Value Fund is currently generating about 0.08 per unit of volatility. If you would invest 1,510 in Ab Value Fund on September 3, 2024 and sell it today you would earn a total of 566.00 from holding Ab Value Fund or generate 37.48% 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 Special vs. Ab Value Fund
Performance |
| Timeline |
| Sterling Capital Special |
| Ab Value Fund |
Sterling Capital and Ab Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Ab Value
The main advantage of trading using opposite Sterling Capital and Ab Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Ab Value 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 Ab Value will offset losses from the drop in Ab Value's long position.| Sterling Capital vs. Vanguard Total Stock | Sterling Capital vs. Vanguard 500 Index | Sterling Capital vs. Vanguard Total Stock | Sterling Capital vs. Vanguard Total Stock |
| Ab Value vs. Dodge Cox Stock | Ab Value vs. American Funds American | Ab Value vs. American Funds American | Ab Value vs. American Mutual 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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