Correlation Between Steward Funds and Pace Small/medium
Can any of the company-specific risk be diversified away by investing in both Steward Funds and Pace Small/medium 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 Funds and Pace Small/medium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Funds and Pace Smallmedium Growth, you can compare the effects of market volatilities on Steward Funds and Pace Small/medium 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 Funds with a short position of Pace Small/medium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Funds and Pace Small/medium.
Diversification Opportunities for Steward Funds and Pace Small/medium
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Steward and Pace is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Steward Funds and Pace Smallmedium Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Smallmedium Growth and Steward Funds 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 Funds are associated (or correlated) with Pace Small/medium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Smallmedium Growth has no effect on the direction of Steward Funds i.e., Steward Funds and Pace Small/medium go up and down completely randomly.
Pair Corralation between Steward Funds and Pace Small/medium
Assuming the 90 days horizon Steward Funds is expected to generate 0.74 times more return on investment than Pace Small/medium. However, Steward Funds is 1.35 times less risky than Pace Small/medium. It trades about 0.1 of its potential returns per unit of risk. Pace Smallmedium Growth is currently generating about 0.06 per unit of risk. If you would invest 2,115 in Steward Funds on September 4, 2024 and sell it today you would earn a total of 1,103 from holding Steward Funds or generate 52.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Funds vs. Pace Smallmedium Growth
Performance |
| Timeline |
| Steward Funds |
| Pace Smallmedium Growth |
Steward Funds and Pace Small/medium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Funds and Pace Small/medium
The main advantage of trading using opposite Steward Funds and Pace Small/medium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Funds position performs unexpectedly, Pace Small/medium 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 Pace Small/medium will offset losses from the drop in Pace Small/medium's long position.| Steward Funds vs. Morgan Stanley Emerging | Steward Funds vs. Locorr Market Trend | Steward Funds vs. Mondrian Emerging Markets | Steward Funds vs. Oklahoma College Savings |
| Pace Small/medium vs. Harbor Diversified International | Pace Small/medium vs. Delaware Limited Term Diversified | Pace Small/medium vs. Northern Small Cap | Pace Small/medium vs. Legg Mason Bw |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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