Correlation Between Eic Value and Steward Covered
Can any of the company-specific risk be diversified away by investing in both Eic Value and Steward Covered 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 Eic Value and Steward Covered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eic Value Fund and Steward Ered Call, you can compare the effects of market volatilities on Eic Value and Steward Covered 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 Eic Value with a short position of Steward Covered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eic Value and Steward Covered.
Diversification Opportunities for Eic Value and Steward Covered
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eic and Steward is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eic Value Fund and Steward Ered Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Ered Call and Eic Value 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 Eic Value Fund are associated (or correlated) with Steward Covered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Ered Call has no effect on the direction of Eic Value i.e., Eic Value and Steward Covered go up and down completely randomly.
Pair Corralation between Eic Value and Steward Covered
Assuming the 90 days horizon Eic Value Fund is expected to generate 1.13 times more return on investment than Steward Covered. However, Eic Value is 1.13 times more volatile than Steward Ered Call. It trades about 0.08 of its potential returns per unit of risk. Steward Ered Call is currently generating about -0.08 per unit of risk. If you would invest 1,770 in Eic Value Fund on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Eic Value Fund or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eic Value Fund vs. Steward Ered Call
Performance |
| Timeline |
| Eic Value Fund |
| Steward Ered Call |
Eic Value and Steward Covered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eic Value and Steward Covered
The main advantage of trading using opposite Eic Value and Steward Covered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eic Value position performs unexpectedly, Steward Covered 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 Steward Covered will offset losses from the drop in Steward Covered's long position.| Eic Value vs. Prudential California Muni | Eic Value vs. Us Government Securities | Eic Value vs. John Hancock Government | Eic Value vs. Vanguard Intermediate Term Government |
| Steward Covered vs. Pimco Energy Tactical | Steward Covered vs. Fidelity Advisor Energy | Steward Covered vs. Transamerica Mlp Energy | Steward Covered vs. Transamerica Mlp Energy |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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