Correlation Between Nasdaq 100 and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Sterling Capital 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 Nasdaq 100 and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Sterling Capital North, you can compare the effects of market volatilities on Nasdaq 100 and Sterling Capital 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 Nasdaq 100 with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Sterling Capital.
Diversification Opportunities for Nasdaq 100 and Sterling Capital
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nasdaq and Sterling is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Sterling Capital North in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital North and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital North has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Sterling Capital go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Sterling Capital
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 7.67 times more return on investment than Sterling Capital. However, Nasdaq 100 is 7.67 times more volatile than Sterling Capital North. It trades about 0.08 of its potential returns per unit of risk. Sterling Capital North is currently generating about 0.11 per unit of risk. If you would invest 4,664 in Nasdaq 100 Index Fund on September 1, 2024 and sell it today you would earn a total of 598.00 from holding Nasdaq 100 Index Fund or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Sterling Capital North
Performance |
| Timeline |
| Nasdaq 100 Index |
| Sterling Capital North |
Nasdaq 100 and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Sterling Capital
The main advantage of trading using opposite Nasdaq 100 and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Nasdaq 100 vs. Alliancebernstein National Municipal | Nasdaq 100 vs. Nuveen Arizona Municipal | Nasdaq 100 vs. Bbh Intermediate Municipal | Nasdaq 100 vs. Old Westbury Municipal |
| Sterling Capital vs. Harbor Diversified International | Sterling Capital vs. Evaluator Conservative Rms | Sterling Capital vs. American Funds Conservative | Sterling Capital vs. Jhancock Diversified Macro |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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