Correlation Between Steward Global and Steward International
Can any of the company-specific risk be diversified away by investing in both Steward Global and Steward International 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 Global and Steward International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Global Equity and Steward International Enhanced, you can compare the effects of market volatilities on Steward Global and Steward International 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 Global with a short position of Steward International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Global and Steward International.
Diversification Opportunities for Steward Global and Steward International
0.6 | Correlation Coefficient |
Poor 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 Global Equity and Steward International Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward International and Steward Global 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 Global Equity are associated (or correlated) with Steward International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward International has no effect on the direction of Steward Global i.e., Steward Global and Steward International go up and down completely randomly.
Pair Corralation between Steward Global and Steward International
Assuming the 90 days horizon Steward Global Equity is expected to generate 0.88 times more return on investment than Steward International. However, Steward Global Equity is 1.13 times less risky than Steward International. It trades about 0.06 of its potential returns per unit of risk. Steward International Enhanced is currently generating about 0.04 per unit of risk. If you would invest 3,379 in Steward Global Equity on September 1, 2024 and sell it today you would earn a total of 322.00 from holding Steward Global Equity or generate 9.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Global Equity vs. Steward International Enhanced
Performance |
| Timeline |
| Steward Global Equity |
| Steward International |
Steward Global and Steward International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Global and Steward International
The main advantage of trading using opposite Steward Global and Steward International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Global position performs unexpectedly, Steward International 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 International will offset losses from the drop in Steward International's long position.| Steward Global vs. Steward Small Mid Cap | Steward Global vs. Steward Large Cap | Steward Global vs. Steward International Enhanced | Steward Global vs. Steward Select Bond |
| Steward International vs. Steward International Enhanced | Steward International vs. Steward Large Cap | Steward International vs. Steward Global E | Steward International vs. Aquagold International |
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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