Correlation Between Crossmark Steward and Balanced Strategy
Can any of the company-specific risk be diversified away by investing in both Crossmark Steward and Balanced Strategy 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 Crossmark Steward and Balanced Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crossmark Steward Equity and Balanced Strategy Fund, you can compare the effects of market volatilities on Crossmark Steward and Balanced Strategy 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 Crossmark Steward with a short position of Balanced Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossmark Steward and Balanced Strategy.
Diversification Opportunities for Crossmark Steward and Balanced Strategy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crossmark and Balanced is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Crossmark Steward Equity and Balanced Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Strategy and Crossmark Steward 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 Crossmark Steward Equity are associated (or correlated) with Balanced Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Strategy has no effect on the direction of Crossmark Steward i.e., Crossmark Steward and Balanced Strategy go up and down completely randomly.
Pair Corralation between Crossmark Steward and Balanced Strategy
Assuming the 90 days horizon Crossmark Steward Equity is expected to under-perform the Balanced Strategy. In addition to that, Crossmark Steward is 1.31 times more volatile than Balanced Strategy Fund. It trades about -0.17 of its total potential returns per unit of risk. Balanced Strategy Fund is currently generating about 0.13 per unit of volatility. If you would invest 1,111 in Balanced Strategy Fund on August 29, 2024 and sell it today you would earn a total of 15.00 from holding Balanced Strategy Fund or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crossmark Steward Equity vs. Balanced Strategy Fund
Performance |
| Timeline |
| Crossmark Steward Equity |
| Balanced Strategy |
Crossmark Steward and Balanced Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossmark Steward and Balanced Strategy
The main advantage of trading using opposite Crossmark Steward and Balanced Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossmark Steward position performs unexpectedly, Balanced Strategy 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 Balanced Strategy will offset losses from the drop in Balanced Strategy's long position.| Crossmark Steward vs. Steward Small Mid Cap | Crossmark Steward vs. Steward Small Mid Cap | Crossmark Steward vs. Steward Ered Call | Crossmark Steward vs. Steward Ered Call |
| Balanced Strategy vs. International Developed Markets | Balanced Strategy vs. Global Real Estate | Balanced Strategy vs. Global Real Estate | Balanced Strategy vs. Global Real Estate |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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