Correlation Between Vanguard Explorer and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer 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 Vanguard Explorer and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Fund and Sterling Capital Stratton, you can compare the effects of market volatilities on Vanguard Explorer 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 Vanguard Explorer with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Sterling Capital.
Diversification Opportunities for Vanguard Explorer and Sterling Capital
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Sterling is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund and Sterling Capital Stratton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Stratton and Vanguard Explorer 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 Vanguard Explorer 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 Stratton has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and Sterling Capital go up and down completely randomly.
Pair Corralation between Vanguard Explorer and Sterling Capital
Assuming the 90 days horizon Vanguard Explorer Fund is expected to generate 1.16 times more return on investment than Sterling Capital. However, Vanguard Explorer is 1.16 times more volatile than Sterling Capital Stratton. It trades about 0.16 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.17 per unit of risk. If you would invest 11,323 in Vanguard Explorer Fund on August 26, 2024 and sell it today you would earn a total of 828.00 from holding Vanguard Explorer Fund or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Explorer Fund vs. Sterling Capital Stratton
Performance |
| Timeline |
| Vanguard Explorer |
| Sterling Capital Stratton |
Vanguard Explorer and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and Sterling Capital
The main advantage of trading using opposite Vanguard Explorer and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer 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.| Vanguard Explorer vs. Vanguard International Growth | Vanguard Explorer vs. Vanguard Windsor Ii | Vanguard Explorer vs. Vanguard Primecap Fund | Vanguard Explorer vs. Vanguard Growth Fund |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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