Correlation Between Voya Large and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Voya Large 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 Voya Large and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Large Cap and Sterling Capital Stratton, you can compare the effects of market volatilities on Voya Large 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 Voya Large with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Large and Sterling Capital.
Diversification Opportunities for Voya Large and Sterling Capital
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between VOYA and STERLING is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Voya Large Cap 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 Voya Large 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 Voya Large Cap 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 Voya Large i.e., Voya Large and Sterling Capital go up and down completely randomly.
Pair Corralation between Voya Large and Sterling Capital
Assuming the 90 days horizon Voya Large Cap is expected to generate 1.23 times more return on investment than Sterling Capital. However, Voya Large is 1.23 times more volatile than Sterling Capital Stratton. It trades about 0.18 of its potential returns per unit of risk. Sterling Capital Stratton is currently generating about 0.12 per unit of risk. If you would invest 1,742 in Voya Large Cap on August 29, 2024 and sell it today you would earn a total of 83.00 from holding Voya Large Cap or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Large Cap vs. Sterling Capital Stratton
Performance |
| Timeline |
| Voya Large Cap |
| Sterling Capital Stratton |
Voya Large and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Large and Sterling Capital
The main advantage of trading using opposite Voya Large and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Large 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.| Voya Large vs. Sterling Capital Stratton | Voya Large vs. Jhancock Real Estate | Voya Large vs. John Hancock Variable | Voya Large vs. Msif Real Estate |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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