Correlation Between Steward Small-mid and Steward Select
Can any of the company-specific risk be diversified away by investing in both Steward Small-mid 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-mid 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-mid 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-mid with a short position of Steward Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Small-mid and Steward Select.
Diversification Opportunities for Steward Small-mid and Steward Select
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steward and Steward is 0.49. 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-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 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-mid i.e., Steward Small-mid and Steward Select go up and down completely randomly.
Pair Corralation between Steward Small-mid and Steward Select
Assuming the 90 days horizon Steward Small Mid Cap is expected to generate 4.26 times more return on investment than Steward Select. However, Steward Small-mid is 4.26 times more volatile than Steward Select Bond. It trades about 0.03 of its potential returns per unit of risk. Steward Select Bond is currently generating about 0.03 per unit of risk. If you would invest 1,097 in Steward Small Mid Cap on May 2, 2025 and sell it today you would earn a total of 189.00 from holding Steward Small Mid Cap or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Small Mid Cap vs. Steward Select Bond
Performance |
| Timeline |
| Steward Small Mid |
| Steward Select Bond |
Steward Small-mid and Steward Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Small-mid and Steward Select
The main advantage of trading using opposite Steward Small-mid and Steward Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Small-mid 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-mid vs. Alpine Ultra Short | Steward Small-mid vs. Ab Municipal Bond | Steward Small-mid vs. Franklin Adjustable Government | Steward Small-mid vs. Bbh Intermediate Municipal |
| Steward Select vs. Steward Large Cap | Steward Select vs. Steward Small Mid Cap | Steward Select vs. Steward Select Bond | Steward Select vs. Steward Large 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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