Correlation Between Steward Ered and Steward Select
Can any of the company-specific risk be diversified away by investing in both Steward Ered and Steward Select 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 Steward Ered and Steward Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Ered Call and Steward Select Bond, you can compare the effects of market volatilities on Steward Ered and Steward Select 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 Steward Ered with a short position of Steward Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Ered and Steward Select.
Diversification Opportunities for Steward Ered and Steward Select
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Steward and Steward is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Steward Ered Call and Steward Select Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Select Bond and Steward Ered 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 Steward Ered Call are associated (or correlated) with Steward Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Select Bond has no effect on the direction of Steward Ered i.e., Steward Ered and Steward Select go up and down completely randomly.
Pair Corralation between Steward Ered and Steward Select
Assuming the 90 days horizon Steward Ered Call is expected to generate 2.29 times more return on investment than Steward Select. However, Steward Ered is 2.29 times more volatile than Steward Select Bond. It trades about 0.08 of its potential returns per unit of risk. Steward Select Bond is currently generating about 0.03 per unit of risk. If you would invest 759.00 in Steward Ered Call on August 25, 2024 and sell it today you would earn a total of 74.00 from holding Steward Ered Call or generate 9.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Ered Call vs. Steward Select Bond
Performance |
| Timeline |
| Steward Ered Call |
| Steward Select Bond |
Steward Ered and Steward Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Ered and Steward Select
The main advantage of trading using opposite Steward Ered and Steward Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Ered position performs unexpectedly, Steward Select 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 Select will offset losses from the drop in Steward Select's long position.| Steward Ered vs. Steward Small Mid Cap | Steward Ered vs. Steward Small Mid Cap | Steward Ered vs. Steward Ered Call | Steward Ered vs. Steward Select Bond |
| Steward Select vs. Steward Large Cap | Steward Select vs. Steward Small Mid Cap | Steward Select vs. Steward Select Bond | Steward Select vs. Steward International Enhanced |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |