Correlation Between Steward Large and Cref Inflation-linked
Can any of the company-specific risk be diversified away by investing in both Steward Large and Cref Inflation-linked 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 Large and Cref Inflation-linked into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Large Cap and Cref Inflation Linked Bond, you can compare the effects of market volatilities on Steward Large and Cref Inflation-linked 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 Large with a short position of Cref Inflation-linked. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Large and Cref Inflation-linked.
Diversification Opportunities for Steward Large and Cref Inflation-linked
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Steward and CREF is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Steward Large Cap and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked and Steward Large 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 Large Cap are associated (or correlated) with Cref Inflation-linked. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Steward Large i.e., Steward Large and Cref Inflation-linked go up and down completely randomly.
Pair Corralation between Steward Large and Cref Inflation-linked
Assuming the 90 days horizon Steward Large Cap is expected to generate 6.83 times more return on investment than Cref Inflation-linked. However, Steward Large is 6.83 times more volatile than Cref Inflation Linked Bond. It trades about 0.01 of its potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.06 per unit of risk. If you would invest 3,843 in Steward Large Cap on September 4, 2024 and sell it today you would lose (28.00) from holding Steward Large Cap or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Steward Large Cap vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| Steward Large Cap |
| Cref Inflation Linked |
Steward Large and Cref Inflation-linked Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Large and Cref Inflation-linked
The main advantage of trading using opposite Steward Large and Cref Inflation-linked positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Large position performs unexpectedly, Cref Inflation-linked 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 Cref Inflation-linked will offset losses from the drop in Cref Inflation-linked's long position.| Steward Large vs. Oil Gas Ultrasector | Steward Large vs. Salient Mlp Energy | Steward Large vs. Adams Natural Resources | Steward Large vs. Invesco Energy Fund |
| Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard 500 Index | Cref Inflation-linked vs. Vanguard Total Stock | Cref Inflation-linked vs. Vanguard Total Stock |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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