Correlation Between Steward Funds and Ab Small
Can any of the company-specific risk be diversified away by investing in both Steward Funds and Ab 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 Funds and Ab Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Funds and Ab Small Cap, you can compare the effects of market volatilities on Steward Funds and Ab 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 Funds with a short position of Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Funds and Ab Small.
Diversification Opportunities for Steward Funds and Ab Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Steward and SCYVX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Steward Funds and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Steward Funds i.e., Steward Funds and Ab Small go up and down completely randomly.
Pair Corralation between Steward Funds and Ab Small
Assuming the 90 days horizon Steward Funds is expected to generate 1.42 times less return on investment than Ab Small. But when comparing it to its historical volatility, Steward Funds is 1.63 times less risky than Ab Small. It trades about 0.28 of its potential returns per unit of risk. Ab Small Cap is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,516 in Ab Small Cap on August 29, 2024 and sell it today you would earn a total of 138.00 from holding Ab Small Cap or generate 9.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Funds vs. Ab Small Cap
Performance |
| Timeline |
| Steward Funds |
| Ab Small Cap |
Steward Funds and Ab Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Funds and Ab Small
The main advantage of trading using opposite Steward Funds and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Funds position performs unexpectedly, Ab 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 Ab Small will offset losses from the drop in Ab Small's long position.| Steward Funds vs. Ab Small Cap | Steward Funds vs. Fisher Small Cap | Steward Funds vs. Gmo Small Cap | Steward Funds vs. Vanguard Strategic Small Cap |
| Ab Small vs. Absolute Convertible Arbitrage | Ab Small vs. Gabelli Convertible And | Ab Small vs. Fidelity Sai Convertible | Ab Small vs. Advent Claymore Convertible |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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