Correlation Between Mfs Variable and Sterling Capital

Can any of the company-specific risk be diversified away by investing in both Mfs Variable 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 Mfs Variable and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mfs Variable Insurance and Sterling Capital Behavioral, you can compare the effects of market volatilities on Mfs Variable 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 Mfs Variable with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Variable and Sterling Capital.

Diversification Opportunities for Mfs Variable and Sterling Capital

0.64

Correlation Coefficient

Mfs Variable  Sterling Capital

Poor diversification

The 3 months correlation between Mfs and Sterling is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Variable Insurance and Sterling Capital Behavioral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Beh and Mfs Variable 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 Mfs Variable Insurance 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 Beh has no effect on the direction of Mfs Variable i.e., Mfs Variable and Sterling Capital go up and down completely randomly.

Pair Corralation between Mfs Variable and Sterling Capital

Assuming the 90 days horizon Mfs Variable is expected to generate 84.24 times less return on investment than Sterling Capital. But when comparing it to its historical volatility, Mfs Variable Insurance is 1.22 times less risky than Sterling Capital. It trades about 0.0 of its potential returns per unit of risk. Sterling Capital Behavioral is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,789  in Sterling Capital Behavioral on May 2, 2025 and sell it today you would earn a total of  157.00  from holding Sterling Capital Behavioral or generate 8.78% return on investment over 90 days.

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

Mfs Variable Insurance  vs.  Sterling Capital Behavioral

Mfs Variable Insurance

Risk-Adjusted Performance

Insignificant

Over the last 90 days Mfs Variable Insurance has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Mfs Variable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sterling Capital Beh

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sterling Capital Behavioral are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Sterling Capital may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Mfs Variable and Sterling Capital

The main advantage of trading using opposite Mfs Variable and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Variable 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.

The idea behind Mfs Variable Insurance and Sterling Capital Behavioral 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.

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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.