Correlation Between NYSE Composite and Steward Funds
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Steward Funds 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 NYSE Composite and Steward Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Steward Funds , you can compare the effects of market volatilities on NYSE Composite and Steward Funds 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 NYSE Composite with a short position of Steward Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Steward Funds.
Diversification Opportunities for NYSE Composite and Steward Funds
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Steward is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Steward Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Funds and NYSE Composite 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 NYSE Composite are associated (or correlated) with Steward Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Funds has no effect on the direction of NYSE Composite i.e., NYSE Composite and Steward Funds go up and down completely randomly.
Pair Corralation between NYSE Composite and Steward Funds
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.82 times less return on investment than Steward Funds. But when comparing it to its historical volatility, NYSE Composite is 1.38 times less risky than Steward Funds. It trades about 0.24 of its potential returns per unit of risk. Steward Funds is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,030 in Steward Funds on August 26, 2024 and sell it today you would earn a total of 192.00 from holding Steward Funds or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Steward Funds
Performance |
| Timeline |
NYSE Composite and Steward Funds Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Steward Funds
Pair trading matchups for Steward Funds
Pair Trading with NYSE Composite and Steward Funds
The main advantage of trading using opposite NYSE Composite and Steward Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Steward Funds 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 Funds will offset losses from the drop in Steward Funds' long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Steward Funds vs. Jhancock Short Duration | Steward Funds vs. Aqr Long Short Equity | Steward Funds vs. Quantitative Longshort Equity | Steward Funds vs. Short Intermediate Bond Fund |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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