Correlation Between Steward Small-mid and Cognios Market
Can any of the company-specific risk be diversified away by investing in both Steward Small-mid and Cognios Market 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 Cognios Market 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 Cognios Market Neutral, you can compare the effects of market volatilities on Steward Small-mid and Cognios Market 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 Cognios Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Small-mid and Cognios Market.
Diversification Opportunities for Steward Small-mid and Cognios Market
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steward and Cognios is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Steward Small Mid Cap and Cognios Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognios Market Neutral 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 Cognios Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognios Market Neutral has no effect on the direction of Steward Small-mid i.e., Steward Small-mid and Cognios Market go up and down completely randomly.
Pair Corralation between Steward Small-mid and Cognios Market
Assuming the 90 days horizon Steward Small Mid Cap is expected to generate 17.84 times more return on investment than Cognios Market. However, Steward Small-mid is 17.84 times more volatile than Cognios Market Neutral. It trades about 0.25 of its potential returns per unit of risk. Cognios Market Neutral is currently generating about -0.22 per unit of risk. If you would invest 1,191 in Steward Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 95.00 from holding Steward Small Mid Cap or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Small Mid Cap vs. Cognios Market Neutral
Performance |
| Timeline |
| Steward Small Mid |
| Cognios Market Neutral |
Steward Small-mid and Cognios Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Small-mid and Cognios Market
The main advantage of trading using opposite Steward Small-mid and Cognios Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Small-mid position performs unexpectedly, Cognios Market 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 Cognios Market will offset losses from the drop in Cognios Market'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 |
| Cognios Market vs. Aqr Long Short Equity | Cognios Market vs. Aqr Equity Market | Cognios Market vs. Cognios Market Neutral | Cognios Market vs. Aqr Managed Futures |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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