Correlation Between Steward International and Steward Large
Can any of the company-specific risk be diversified away by investing in both Steward International and Steward Large 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 International and Steward Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward International Enhanced and Steward Large Cap, you can compare the effects of market volatilities on Steward International and Steward Large 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 International with a short position of Steward Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward International and Steward Large.
Diversification Opportunities for Steward International and Steward Large
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Steward and Steward is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Steward International Enhanced and Steward Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Large Cap and Steward International 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 International Enhanced are associated (or correlated) with Steward Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Large Cap has no effect on the direction of Steward International i.e., Steward International and Steward Large go up and down completely randomly.
Pair Corralation between Steward International and Steward Large
Assuming the 90 days horizon Steward International is expected to generate 1.52 times less return on investment than Steward Large. In addition to that, Steward International is 1.16 times more volatile than Steward Large Cap. It trades about 0.08 of its total potential returns per unit of risk. Steward Large Cap is currently generating about 0.15 per unit of volatility. If you would invest 2,747 in Steward Large Cap on August 29, 2024 and sell it today you would earn a total of 1,064 from holding Steward Large Cap or generate 38.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward International Enhanced vs. Steward Large Cap
Performance |
| Timeline |
| Steward International |
| Steward Large Cap |
Steward International and Steward Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward International and Steward Large
The main advantage of trading using opposite Steward International and Steward Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward International position performs unexpectedly, Steward Large 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 Steward Large will offset losses from the drop in Steward Large's long position.| Steward International vs. Steward International Enhanced | Steward International vs. Steward Large Cap | Steward International vs. Steward International Enhanced | Steward International vs. Steward Global E |
| Steward Large vs. Vanguard Total Stock | Steward Large vs. Vanguard 500 Index | Steward Large vs. Vanguard Total Stock | Steward Large vs. Vanguard Total Stock |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |