Correlation Between Vanguard Mid and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid 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 Mid 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 Mid Cap Index and Sterling Capital Stratton, you can compare the effects of market volatilities on Vanguard Mid 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 Mid with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid and Sterling Capital.
Diversification Opportunities for Vanguard Mid and Sterling Capital
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Vanguard and Sterling is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Index 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 Mid 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 Mid Cap Index 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 Mid i.e., Vanguard Mid and Sterling Capital go up and down completely randomly.
Pair Corralation between Vanguard Mid and Sterling Capital
Assuming the 90 days horizon Vanguard Mid Cap Index is expected to generate 0.75 times more return on investment than Sterling Capital. However, Vanguard Mid Cap Index is 1.34 times less risky than Sterling Capital. It trades about 0.46 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.26 per unit of risk. If you would invest 7,185 in Vanguard Mid Cap Index on September 4, 2024 and sell it today you would earn a total of 571.00 from holding Vanguard Mid Cap Index or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Mid Cap Index vs. Sterling Capital Stratton
Performance |
| Timeline |
| Vanguard Mid Cap |
| Sterling Capital Stratton |
Vanguard Mid and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid and Sterling Capital
The main advantage of trading using opposite Vanguard Mid and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid 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 Mid vs. Vanguard Small Cap Index | Vanguard Mid vs. Vanguard Institutional Index | Vanguard Mid vs. Vanguard Total Bond | Vanguard Mid vs. Vanguard Total International |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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