Correlation Between Vanguard Windsor and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Vanguard Windsor 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 Windsor 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 Windsor Fund and Sterling Capital Mid, you can compare the effects of market volatilities on Vanguard Windsor 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 Windsor with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Windsor and Sterling Capital.
Diversification Opportunities for Vanguard Windsor and Sterling Capital
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VANGUARD and STERLING is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Windsor Fund 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 Vanguard Windsor 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 Windsor 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 Mid has no effect on the direction of Vanguard Windsor i.e., Vanguard Windsor and Sterling Capital go up and down completely randomly.
Pair Corralation between Vanguard Windsor and Sterling Capital
Assuming the 90 days horizon Vanguard Windsor is expected to generate 1.07 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Vanguard Windsor Fund is 1.27 times less risky than Sterling Capital. It trades about 0.32 of its potential returns per unit of risk. Sterling Capital Mid is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,580 in Sterling Capital Mid on September 4, 2024 and sell it today you would earn a total of 97.00 from holding Sterling Capital Mid or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Windsor Fund vs. Sterling Capital Mid
Performance |
| Timeline |
| Vanguard Windsor |
| Sterling Capital Mid |
Vanguard Windsor and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Windsor and Sterling Capital
The main advantage of trading using opposite Vanguard Windsor and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Windsor 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 Windsor vs. Vanguard Explorer Fund | Vanguard Windsor vs. Vanguard Primecap Fund | Vanguard Windsor vs. Vanguard Wellington Fund | Vanguard Windsor vs. Vanguard Windsor Ii |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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