Correlation Between Steward Global and Steward Small
Can any of the company-specific risk be diversified away by investing in both Steward Global and Steward Small 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 Small 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 Small Mid Cap, you can compare the effects of market volatilities on Steward Global and Steward Small 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 Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Global and Steward Small.
Diversification Opportunities for Steward Global and Steward Small
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steward and Steward is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Steward Global Equity and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid 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 Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of Steward Global i.e., Steward Global and Steward Small go up and down completely randomly.
Pair Corralation between Steward Global and Steward Small
Assuming the 90 days horizon Steward Global Equity is expected to under-perform the Steward Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Steward Global Equity is 1.6 times less risky than Steward Small. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Steward Small Mid Cap is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,257 in Steward Small Mid Cap on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Steward Small Mid Cap or generate 0.64% 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 Small Mid Cap
Performance |
| Timeline |
| Steward Global Equity |
| Steward Small Mid |
Steward Global and Steward Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Global and Steward Small
The main advantage of trading using opposite Steward Global and Steward Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Global position performs unexpectedly, Steward Small 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 Small will offset losses from the drop in Steward Small's long position.| Steward Global vs. Steward Small Mid Cap | Steward Global vs. Steward Small Mid Cap | Steward Global vs. Steward Ered Call | Steward Global vs. Steward Ered Call |
| Steward Small vs. Baird Strategic Municipal | Steward Small vs. The National Tax Free | Steward Small vs. Blrc Sgy Mnp | Steward Small vs. Pace Municipal Fixed |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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