Correlation Between Steward Small-mid and Conestoga Small
Can any of the company-specific risk be diversified away by investing in both Steward Small-mid and Conestoga 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 Small-mid and Conestoga Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Small Mid Cap and Conestoga Small Cap, you can compare the effects of market volatilities on Steward Small-mid and Conestoga 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 Small-mid with a short position of Conestoga Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Small-mid and Conestoga Small.
Diversification Opportunities for Steward Small-mid and Conestoga Small
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Steward and Conestoga is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Steward Small Mid Cap and Conestoga Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conestoga Small Cap and Steward Small-mid 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 Small Mid Cap are associated (or correlated) with Conestoga Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conestoga Small Cap has no effect on the direction of Steward Small-mid i.e., Steward Small-mid and Conestoga Small go up and down completely randomly.
Pair Corralation between Steward Small-mid and Conestoga Small
Assuming the 90 days horizon Steward Small-mid is expected to generate 5.25 times less return on investment than Conestoga Small. In addition to that, Steward Small-mid is 1.31 times more volatile than Conestoga Small Cap. It trades about 0.01 of its total potential returns per unit of risk. Conestoga Small Cap is currently generating about 0.06 per unit of volatility. If you would invest 6,031 in Conestoga Small Cap on August 30, 2024 and sell it today you would earn a total of 2,305 from holding Conestoga Small Cap or generate 38.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Small Mid Cap vs. Conestoga Small Cap
Performance |
| Timeline |
| Steward Small Mid |
| Conestoga Small Cap |
Steward Small-mid and Conestoga Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Small-mid and Conestoga Small
The main advantage of trading using opposite Steward Small-mid and Conestoga Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Small-mid position performs unexpectedly, Conestoga 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 Conestoga Small will offset losses from the drop in Conestoga Small's long position.| Steward Small-mid vs. Dreyfus Technology Growth | Steward Small-mid vs. Firsthand Technology Opportunities | Steward Small-mid vs. Mfs Technology Fund | Steward Small-mid vs. Invesco Technology Fund |
| Conestoga Small vs. T Rowe Price | Conestoga Small vs. T Rowe Price | Conestoga Small vs. Fidelity Small Cap | Conestoga Small vs. Virtus Kar Small Cap |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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