Correlation Between Sterling Capital and ClearBridge Large

Can any of the company-specific risk be diversified away by investing in both Sterling Capital and ClearBridge Large 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 ClearBridge Large 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 ClearBridge Large Cap, you can compare the effects of market volatilities on Sterling Capital and ClearBridge Large 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 ClearBridge Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and ClearBridge Large.

Diversification Opportunities for Sterling Capital and ClearBridge Large

0.97

Correlation Coefficient

Sterling Capital  ClearBridge Large

Almost no diversification

The 3 months correlation between Sterling and ClearBridge is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Focus and ClearBridge Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearBridge Large 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 Focus are associated (or correlated) with ClearBridge Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearBridge Large Cap has no effect on the direction of Sterling Capital i.e., Sterling Capital and ClearBridge Large go up and down completely randomly.

Pair Corralation between Sterling Capital and ClearBridge Large

Considering the 90-day investment horizon Sterling Capital is expected to generate 1.1 times less return on investment than ClearBridge Large. In addition to that, Sterling Capital is 1.27 times more volatile than ClearBridge Large Cap. It trades about 0.11 of its total potential returns per unit of risk. ClearBridge Large Cap is currently generating about 0.15 per unit of volatility. If you would invest  7,169  in ClearBridge Large Cap on May 4, 2025 and sell it today you would earn a total of  630.00  from holding ClearBridge Large Cap or generate 8.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Sterling Capital Focus  vs.  ClearBridge Large Cap

Sterling Capital Focus

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital Focus are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Sterling Capital may actually be approaching a critical reversion point that can send shares even higher in September 2025.

ClearBridge Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ClearBridge Large Cap are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, ClearBridge Large may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Sterling Capital and ClearBridge Large

The main advantage of trading using opposite Sterling Capital and ClearBridge Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital position performs unexpectedly, ClearBridge Large 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 ClearBridge Large will offset losses from the drop in ClearBridge Large's long position.

The idea behind Sterling Capital Focus and ClearBridge Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.