Correlation Between Sterling Capital and Ab Global
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Ab Global 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 Global 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 Ab Global Risk, you can compare the effects of market volatilities on Sterling Capital and Ab Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Ab Global.
Diversification Opportunities for Sterling Capital and Ab Global
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sterling and CABIX is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and Ab Global Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Global Risk 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 Ab Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Global Risk has no effect on the direction of Sterling Capital i.e., Sterling Capital and Ab Global go up and down completely randomly.
Pair Corralation between Sterling Capital and Ab Global
Assuming the 90 days horizon Sterling Capital Stratton is expected to generate 3.52 times more return on investment than Ab Global. However, Sterling Capital is 3.52 times more volatile than Ab Global Risk. It trades about 0.18 of its potential returns per unit of risk. Ab Global Risk is currently generating about 0.1 per unit of risk. If you would invest 4,947 in Sterling Capital Stratton on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Sterling Capital Stratton or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sterling Capital Stratton vs. Ab Global Risk
Performance |
| Timeline |
| Sterling Capital Stratton |
| Ab Global Risk |
Sterling Capital and Ab Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Ab Global
The main advantage of trading using opposite Sterling Capital and Ab Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Ab Global 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 Global will offset losses from the drop in Ab Global's long position.| Sterling Capital vs. Franklin Lifesmart Retirement | Sterling Capital vs. Qs Moderate Growth | Sterling Capital vs. Pgim Conservative Retirement | Sterling Capital vs. Saat Moderate Strategy |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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