Correlation Between Steward Small-mid and Midcap Value
Can any of the company-specific risk be diversified away by investing in both Steward Small-mid and Midcap Value 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 Midcap Value 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 Midcap Value Fund, you can compare the effects of market volatilities on Steward Small-mid and Midcap Value 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 Midcap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Small-mid and Midcap Value.
Diversification Opportunities for Steward Small-mid and Midcap Value
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Steward and Midcap is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Steward Small Mid Cap and Midcap Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Value 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 Midcap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Value has no effect on the direction of Steward Small-mid i.e., Steward Small-mid and Midcap Value go up and down completely randomly.
Pair Corralation between Steward Small-mid and Midcap Value
Assuming the 90 days horizon Steward Small Mid Cap is expected to generate 1.66 times more return on investment than Midcap Value. However, Steward Small-mid is 1.66 times more volatile than Midcap Value Fund. It trades about 0.25 of its potential returns per unit of risk. Midcap Value Fund is currently generating about 0.27 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 Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Small Mid Cap vs. Midcap Value Fund
Performance |
| Timeline |
| Steward Small Mid |
| Midcap Value |
Steward Small-mid and Midcap Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Small-mid and Midcap Value
The main advantage of trading using opposite Steward Small-mid and Midcap Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Small-mid position performs unexpectedly, Midcap Value 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 Midcap Value will offset losses from the drop in Midcap Value'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 |
| Midcap Value vs. Hennessy Nerstone Mid | Midcap Value vs. Applied Finance Explorer | Midcap Value vs. Queens Road Small | Midcap Value vs. Heartland Value Plus |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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