Correlation Between Sterling Capital and Fidelity Dividend
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Fidelity Dividend 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 Sterling Capital and Fidelity Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Focus and Fidelity Dividend ETF, you can compare the effects of market volatilities on Sterling Capital and Fidelity Dividend 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 Sterling Capital with a short position of Fidelity Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Fidelity Dividend.
Diversification Opportunities for Sterling Capital and Fidelity Dividend
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and Fidelity is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Focus and Fidelity Dividend ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Dividend ETF and Sterling Capital 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 Sterling Capital Focus are associated (or correlated) with Fidelity Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Dividend ETF has no effect on the direction of Sterling Capital i.e., Sterling Capital and Fidelity Dividend go up and down completely randomly.
Pair Corralation between Sterling Capital and Fidelity Dividend
Considering the 90-day investment horizon Sterling Capital Focus is expected to under-perform the Fidelity Dividend. In addition to that, Sterling Capital is 1.82 times more volatile than Fidelity Dividend ETF. It trades about -0.22 of its total potential returns per unit of risk. Fidelity Dividend ETF is currently generating about 0.29 per unit of volatility. If you would invest 4,651 in Fidelity Dividend ETF on March 11, 2024 and sell it today you would earn a total of 147.00 from holding Fidelity Dividend ETF or generate 3.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sterling Capital Focus vs. Fidelity Dividend ETF
Performance |
Timeline |
Sterling Capital Focus |
Fidelity Dividend ETF |
Sterling Capital and Fidelity Dividend Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sterling Capital and Fidelity Dividend
The main advantage of trading using opposite Sterling Capital and Fidelity Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Fidelity Dividend 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 Fidelity Dividend will offset losses from the drop in Fidelity Dividend's long position.Sterling Capital vs. Vanguard Value Index | Sterling Capital vs. Vanguard Information Technology | Sterling Capital vs. Vanguard Small Cap Growth | Sterling Capital vs. Vanguard Dividend Appreciation |
Fidelity Dividend vs. Vanguard Growth Index | Fidelity Dividend vs. Vanguard Small Cap Index | Fidelity Dividend vs. Vanguard FTSE Developed | Fidelity Dividend vs. Morningstar Unconstrained Allocation |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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