Correlation Between Steward Small-mid and Stewart Global
Can any of the company-specific risk be diversified away by investing in both Steward Small-mid and Stewart Global 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 Stewart Global 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 Stewart Global Equity, you can compare the effects of market volatilities on Steward Small-mid and Stewart Global 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 Stewart Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Small-mid and Stewart Global.
Diversification Opportunities for Steward Small-mid and Stewart Global
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steward and Stewart is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Steward Small Mid Cap and Stewart Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Global Equity 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 Stewart Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Global Equity has no effect on the direction of Steward Small-mid i.e., Steward Small-mid and Stewart Global go up and down completely randomly.
Pair Corralation between Steward Small-mid and Stewart Global
Assuming the 90 days horizon Steward Small Mid Cap is expected to generate 1.45 times more return on investment than Stewart Global. However, Steward Small-mid is 1.45 times more volatile than Stewart Global Equity. It trades about 0.09 of its potential returns per unit of risk. Stewart Global Equity is currently generating about 0.06 per unit of risk. If you would invest 1,262 in Steward Small Mid Cap on August 29, 2024 and sell it today you would earn a total of 168.00 from holding Steward Small Mid Cap or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Small Mid Cap vs. Stewart Global Equity
Performance |
| Timeline |
| Steward Small Mid |
| Stewart Global Equity |
Steward Small-mid and Stewart Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Small-mid and Stewart Global
The main advantage of trading using opposite Steward Small-mid and Stewart Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Small-mid position performs unexpectedly, Stewart Global 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 Stewart Global will offset losses from the drop in Stewart Global's long position.| Steward Small-mid vs. Steward Large Cap | Steward Small-mid vs. Steward Global E | Steward Small-mid vs. Steward Select Bond | Steward Small-mid vs. Steward Small Mid Cap |
| Stewart Global vs. Steward Small Mid Cap | Stewart Global vs. Steward Large Cap | Stewart Global vs. Steward International Enhanced | Stewart Global vs. Steward Select Bond |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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