Correlation Between Sterling Capital and Vanguard Mid-cap
Can any of the company-specific risk be diversified away by investing in both Sterling Capital and Vanguard Mid-cap 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 Vanguard Mid-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Smid and Vanguard Mid Cap Index, you can compare the effects of market volatilities on Sterling Capital and Vanguard Mid-cap 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 Vanguard Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Vanguard Mid-cap.
Diversification Opportunities for Sterling Capital and Vanguard Mid-cap
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and Vanguard is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Smid and Vanguard Mid Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Mid Cap 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 Smid are associated (or correlated) with Vanguard Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Mid Cap has no effect on the direction of Sterling Capital i.e., Sterling Capital and Vanguard Mid-cap go up and down completely randomly.
Pair Corralation between Sterling Capital and Vanguard Mid-cap
If you would invest 31,001 in Vanguard Mid Cap Index on January 26, 2024 and sell it today you would earn a total of 1,330 from holding Vanguard Mid Cap Index or generate 4.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 3.23% |
Values | Daily Returns |
Sterling Capital Smid vs. Vanguard Mid Cap Index
Performance |
Timeline |
Sterling Capital Smid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vanguard Mid Cap |
Sterling Capital and Vanguard Mid-cap Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sterling Capital and Vanguard Mid-cap
The main advantage of trading using opposite Sterling Capital and Vanguard Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, Vanguard Mid-cap 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 Vanguard Mid-cap will offset losses from the drop in Vanguard Mid-cap's long position.Sterling Capital vs. Sterling Capital Total | Sterling Capital vs. Sterling Capital Intermediate | Sterling Capital vs. Sterling Capital South | Sterling Capital vs. Sterling Capital South |
Vanguard Mid-cap vs. Government Street Equity | Vanguard Mid-cap vs. Federated Mdt Mid Cap | Vanguard Mid-cap vs. Janus Enterprise Fund | Vanguard Mid-cap vs. Victory Integrity Mid Cap |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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