Correlation Between Sterling Capital and American Funds
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and American Funds 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 American Funds 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 American Funds Inflation, you can compare the effects of market volatilities on Sterling Capital and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and American Funds.
Diversification Opportunities for Sterling Capital and American Funds
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sterling and American is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Stratton and American Funds Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Inflation 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Inflation has no effect on the direction of Sterling Capital i.e., Sterling Capital and American Funds go up and down completely randomly.
Pair Corralation between Sterling Capital and American Funds
Assuming the 90 days horizon Sterling Capital Stratton is expected to under-perform the American Funds. In addition to that, Sterling Capital is 7.89 times more volatile than American Funds Inflation. It trades about -0.01 of its total potential returns per unit of risk. American Funds Inflation is currently generating about 0.1 per unit of volatility. If you would invest 914.00 in American Funds Inflation on September 13, 2024 and sell it today you would earn a total of 30.00 from holding American Funds Inflation or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Sterling Capital Stratton vs. American Funds Inflation
Performance |
| Timeline |
| Sterling Capital Stratton |
| American Funds Inflation |
Sterling Capital and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and American Funds
The main advantage of trading using opposite Sterling Capital and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
| American Funds vs. Goldman Sachs Clean | American Funds vs. Great West Goldman Sachs | American Funds vs. Sprott Gold Equity | American Funds vs. Precious Metals And |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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