Correlation Between Stewart Information and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both Stewart Information and Commercial Vehicle 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 Information and Commercial Vehicle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stewart Information Services and Commercial Vehicle Group, you can compare the effects of market volatilities on Stewart Information and Commercial Vehicle 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 Information with a short position of Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and Commercial Vehicle.
Diversification Opportunities for Stewart Information and Commercial Vehicle
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stewart and Commercial is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle and Stewart Information 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 Information Services are associated (or correlated) with Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of Stewart Information i.e., Stewart Information and Commercial Vehicle go up and down completely randomly.
Pair Corralation between Stewart Information and Commercial Vehicle
Assuming the 90 days horizon Stewart Information Services is expected to generate 0.5 times more return on investment than Commercial Vehicle. However, Stewart Information Services is 1.99 times less risky than Commercial Vehicle. It trades about 0.18 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.24 per unit of risk. If you would invest 6,350 in Stewart Information Services on August 28, 2024 and sell it today you would earn a total of 450.00 from holding Stewart Information Services or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stewart Information Services vs. Commercial Vehicle Group
Performance |
| Timeline |
| Stewart Information |
| Commercial Vehicle |
Stewart Information and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stewart Information and Commercial Vehicle
The main advantage of trading using opposite Stewart Information and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stewart Information position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| Stewart Information vs. Superior Plus Corp | Stewart Information vs. NMI Holdings | Stewart Information vs. Origin Agritech | Stewart Information vs. SIVERS SEMICONDUCTORS AB |
| Commercial Vehicle vs. MTI WIRELESS EDGE | Commercial Vehicle vs. SALESFORCE INC CDR | Commercial Vehicle vs. Ribbon Communications | Commercial Vehicle vs. CODERE ONLINE LUX |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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