Correlation Between Steward Small and Steward Select
Can any of the company-specific risk be diversified away by investing in both Steward Small and Steward Select 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 and Steward Select 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 Steward Select Bond, you can compare the effects of market volatilities on Steward Small and Steward Select 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 with a short position of Steward Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Small and Steward Select.
Diversification Opportunities for Steward Small and Steward Select
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Steward and Steward is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Steward Small Mid Cap and Steward Select Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Select Bond and Steward Small 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 Steward Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Select Bond has no effect on the direction of Steward Small i.e., Steward Small and Steward Select go up and down completely randomly.
Pair Corralation between Steward Small and Steward Select
Assuming the 90 days horizon Steward Small Mid Cap is expected to generate 7.13 times more return on investment than Steward Select. However, Steward Small is 7.13 times more volatile than Steward Select Bond. It trades about 0.07 of its potential returns per unit of risk. Steward Select Bond is currently generating about -0.06 per unit of risk. If you would invest 1,075 in Steward Small Mid Cap on August 25, 2024 and sell it today you would earn a total of 178.00 from holding Steward Small Mid Cap or generate 16.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Small Mid Cap vs. Steward Select Bond
Performance |
| Timeline |
| Steward Small Mid |
| Steward Select Bond |
Steward Small and Steward Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Small and Steward Select
The main advantage of trading using opposite Steward Small and Steward Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Small position performs unexpectedly, Steward Select 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 Select will offset losses from the drop in Steward Select's long position.| Steward Small vs. Steward Large Cap | Steward Small vs. Steward Global E | Steward Small vs. Steward Select Bond | Steward Small vs. Steward Small Mid Cap |
| Steward Select vs. Steward Small Mid Cap | Steward Select vs. Steward Small Mid Cap | Steward Select vs. Steward Ered Call | Steward Select vs. Steward Ered Call |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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