Correlation Between Crossmark Steward and New Perspective
Can any of the company-specific risk be diversified away by investing in both Crossmark Steward and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Crossmark Steward and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crossmark Steward and New Perspective.
Diversification Opportunities for Crossmark Steward and New Perspective
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Crossmark and New is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Crossmark Steward Equity and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Crossmark Steward i.e., Crossmark Steward and New Perspective go up and down completely randomly.
Pair Corralation between Crossmark Steward and New Perspective
Assuming the 90 days horizon Crossmark Steward Equity is expected to under-perform the New Perspective. But the mutual fund apears to be less risky and, when comparing its historical volatility, Crossmark Steward Equity is 1.14 times less risky than New Perspective. The mutual fund trades about -0.2 of its potential returns per unit of risk. The New Perspective Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,113 in New Perspective Fund on August 30, 2024 and sell it today you would earn a total of 5.00 from holding New Perspective Fund or generate 0.08% 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. New Perspective Fund
Performance |
| Timeline |
| Crossmark Steward Equity |
| New Perspective |
Crossmark Steward and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crossmark Steward and New Perspective
The main advantage of trading using opposite Crossmark Steward and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crossmark Steward position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Crossmark Steward vs. Pgim Jennison Diversified | Crossmark Steward vs. Delaware Limited Term Diversified | Crossmark Steward vs. Davenport Small Cap | Crossmark Steward vs. Guggenheim Diversified Income |
| New Perspective vs. Black Oak Emerging | New Perspective vs. Ab Bond Inflation | New Perspective vs. T Rowe Price | New Perspective vs. Artisan Emerging Markets |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |