Correlation Between Steward Select and Steward Global
Can any of the company-specific risk be diversified away by investing in both Steward Select and Steward 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 Steward 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 Steward Global E, you can compare the effects of market volatilities on Steward Select and Steward 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 Steward Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Select and Steward Global.
Diversification Opportunities for Steward Select and Steward Global
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steward and Steward is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Steward Select Bond and Steward Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Global E 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Global E has no effect on the direction of Steward Select i.e., Steward Select and Steward Global go up and down completely randomly.
Pair Corralation between Steward Select and Steward Global
Assuming the 90 days horizon Steward Select is expected to generate 7.74 times less return on investment than Steward Global. But when comparing it to its historical volatility, Steward Select Bond is 3.22 times less risky than Steward Global. It trades about 0.03 of its potential returns per unit of risk. Steward Global E is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,111 in Steward Global E on August 25, 2024 and sell it today you would earn a total of 362.00 from holding Steward Global E or generate 11.64% 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. Steward Global E
Performance |
| Timeline |
| Steward Select Bond |
| Steward Global E |
Steward Select and Steward Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Select and Steward Global
The main advantage of trading using opposite Steward Select and Steward Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Select position performs unexpectedly, Steward 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 Steward Global will offset losses from the drop in Steward Global'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 Global vs. Steward Large Cap | Steward Global vs. Steward Small Mid Cap | Steward Global vs. Aquagold International | Steward 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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