Correlation Between Valic Company and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Valic Company 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 Valic Company and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Sterling Capital Mid, you can compare the effects of market volatilities on Valic Company 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 Valic Company with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Sterling Capital.
Diversification Opportunities for Valic Company and Sterling Capital
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Valic and Sterling is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Sterling Capital Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Mid and Valic Company 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 Valic Company I 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 Mid has no effect on the direction of Valic Company i.e., Valic Company and Sterling Capital go up and down completely randomly.
Pair Corralation between Valic Company and Sterling Capital
Assuming the 90 days horizon Valic Company I is expected to generate 1.37 times more return on investment than Sterling Capital. However, Valic Company is 1.37 times more volatile than Sterling Capital Mid. It trades about 0.05 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.03 per unit of risk. If you would invest 1,119 in Valic Company I on September 12, 2024 and sell it today you would earn a total of 244.00 from holding Valic Company I or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Sterling Capital Mid
Performance |
| Timeline |
| Valic Company I |
| Sterling Capital Mid |
Valic Company and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Sterling Capital
The main advantage of trading using opposite Valic Company and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company 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.| Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Vanguard Small Cap Value | Valic Company vs. Us Small Cap | Valic Company vs. Us Targeted Value |
| Sterling Capital vs. Valic Company I | Sterling Capital vs. Victory Rs Partners | Sterling Capital vs. Lord Abbett Small | Sterling Capital vs. Great West Loomis Sayles |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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