Correlation Between Stewart Global and Steward Large
Can any of the company-specific risk be diversified away by investing in both Stewart Global and Steward Large 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 Stewart Global and Steward Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stewart Global Equity and Steward Large Cap, you can compare the effects of market volatilities on Stewart Global and Steward Large 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 Stewart Global with a short position of Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Global and Steward Large.
Diversification Opportunities for Stewart Global and Steward Large
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stewart and Steward is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Global Equity and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large Cap and Stewart 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 Stewart Global Equity are associated (or correlated) with Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of Stewart Global i.e., Stewart Global and Steward Large go up and down completely randomly.
Pair Corralation between Stewart Global and Steward Large
Assuming the 90 days horizon Stewart Global is expected to generate 44.08 times less return on investment than Steward Large. But when comparing it to its historical volatility, Stewart Global Equity is 1.06 times less risky than Steward Large. It trades about 0.01 of its potential returns per unit of risk. Steward Large Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 2,954 in Steward Large Cap on August 29, 2024 and sell it today you would earn a total of 205.00 from holding Steward Large Cap or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stewart Global Equity vs. Steward Large Cap
Performance |
| Timeline |
| Stewart Global Equity |
| Steward Large Cap |
Stewart Global and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Global and Steward Large
The main advantage of trading using opposite Stewart Global and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Global position performs unexpectedly, Steward Large 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 Large will offset losses from the drop in Steward Large's long position.| Stewart Global vs. Steward Small Mid Cap | Stewart Global vs. Steward Large Cap | Stewart Global vs. Steward International Enhanced | Stewart Global vs. Steward Select Bond |
| Steward Large vs. Vanguard Total Stock | Steward Large vs. Vanguard 500 Index | Steward Large vs. Vanguard Total Stock | Steward Large 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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