Correlation Between Steward Select and Steward Covered
Can any of the company-specific risk be diversified away by investing in both Steward Select 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 Steward Select and Steward Covered 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 Steward Ered Call, you can compare the effects of market volatilities on Steward Select 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 Steward Select with a short position of Steward Covered. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Select and Steward Covered.
Diversification Opportunities for Steward Select and Steward Covered
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Steward and Steward is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Steward Select Bond 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 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 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 Steward Select i.e., Steward Select and Steward Covered go up and down completely randomly.
Pair Corralation between Steward Select and Steward Covered
Assuming the 90 days horizon Steward Select is expected to generate 6.11 times less return on investment than Steward Covered. But when comparing it to its historical volatility, Steward Select Bond is 2.3 times less risky than Steward Covered. It trades about 0.03 of its potential returns per unit of risk. Steward Ered Call is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 755.00 in Steward Ered Call on August 25, 2024 and sell it today you would earn a total of 70.00 from holding Steward Ered Call or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Select Bond vs. Steward Ered Call
Performance |
| Timeline |
| Steward Select Bond |
| Steward Ered Call |
Steward Select and Steward Covered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Select and Steward Covered
The main advantage of trading using opposite Steward Select and Steward Covered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Select 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.| 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 |
| Steward Covered vs. Pace Smallmedium Value | Steward Covered vs. Fidelity Small Cap | Steward Covered vs. Amg River Road | Steward Covered vs. Palm Valley Capital |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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