Correlation Between Steward Select and Stewart Global
Can any of the company-specific risk be diversified away by investing in both Steward Select and Stewart Global 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 Select and Stewart Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Select Bond and Stewart Global Equity, you can compare the effects of market volatilities on Steward Select and Stewart Global 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 Select with a short position of Stewart Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Select and Stewart Global.
Diversification Opportunities for Steward Select and Stewart Global
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steward and Stewart is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Steward Select Bond and Stewart Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Global Equity and Steward Select 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 Select Bond are associated (or correlated) with Stewart Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Global Equity has no effect on the direction of Steward Select i.e., Steward Select and Stewart Global go up and down completely randomly.
Pair Corralation between Steward Select and Stewart Global
Assuming the 90 days horizon Steward Select is expected to generate 3.85 times less return on investment than Stewart Global. But when comparing it to its historical volatility, Steward Select Bond is 2.66 times less risky than Stewart Global. It trades about 0.04 of its potential returns per unit of risk. Stewart Global Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,754 in Stewart Global Equity on August 26, 2024 and sell it today you would earn a total of 730.00 from holding Stewart Global Equity or generate 26.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Select Bond vs. Stewart Global Equity
Performance |
| Timeline |
| Steward Select Bond |
| Stewart Global Equity |
Steward Select and Stewart Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Select and Stewart Global
The main advantage of trading using opposite Steward Select and Stewart Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Select position performs unexpectedly, Stewart Global 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 Stewart Global will offset losses from the drop in Stewart Global's long position.| Steward Select vs. Steward Small Mid Cap | Steward Select vs. Steward Small Mid Cap | Steward Select vs. Steward Ered Call | Steward Select vs. Steward Ered Call |
| Stewart Global vs. Steward Large Cap | Stewart Global vs. Steward Small Mid Cap | Stewart Global vs. Aquagold International | Stewart Global vs. Morningstar Unconstrained Allocation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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