Correlation Between Steward Funds and Steward Small-mid
Can any of the company-specific risk be diversified away by investing in both Steward Funds and Steward Small-mid 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 Funds and Steward Small-mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward Funds and Steward Small Mid Cap, you can compare the effects of market volatilities on Steward Funds and Steward Small-mid 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 Funds with a short position of Steward Small-mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward Funds and Steward Small-mid.
Diversification Opportunities for Steward Funds and Steward Small-mid
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Steward and Steward is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Steward Funds and Steward Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Small Mid and Steward Funds 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 Funds are associated (or correlated) with Steward Small-mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Small Mid has no effect on the direction of Steward Funds i.e., Steward Funds and Steward Small-mid go up and down completely randomly.
Pair Corralation between Steward Funds and Steward Small-mid
Assuming the 90 days horizon Steward Funds is expected to generate 1.19 times less return on investment than Steward Small-mid. But when comparing it to its historical volatility, Steward Funds is 1.36 times less risky than Steward Small-mid. It trades about 0.15 of its potential returns per unit of risk. Steward Small Mid Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,075 in Steward Small Mid Cap on June 10, 2025 and sell it today you would earn a total of 84.00 from holding Steward Small Mid Cap or generate 7.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steward Funds vs. Steward Small Mid Cap
Performance |
| Timeline |
| Steward Funds |
| Steward Small Mid |
Steward Funds and Steward Small-mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steward Funds and Steward Small-mid
The main advantage of trading using opposite Steward Funds and Steward Small-mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward Funds position performs unexpectedly, Steward Small-mid 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 Small-mid will offset losses from the drop in Steward Small-mid's long position.| Steward Funds vs. Global Resources Fund | Steward Funds vs. Gamco Natural Resources | Steward Funds vs. Energy Basic Materials | Steward Funds vs. Adams Natural Resources |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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