Correlation Between Ave Maria and Steward Global

Can any of the company-specific risk be diversified away by investing in both Ave Maria and Steward 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 Ave Maria and Steward Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ave Maria Rising and Steward Global E, you can compare the effects of market volatilities on Ave Maria and Steward 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 Ave Maria with a short position of Steward Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ave Maria and Steward Global.

Diversification Opportunities for Ave Maria and Steward Global

0.62

Correlation Coefficient

Ave Maria  Steward Global

Poor diversification

The 3 months correlation between Ave and Steward is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ave Maria Rising and Steward Global E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Global E and Ave Maria 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 Ave Maria Rising are associated (or correlated) with Steward Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Global E has no effect on the direction of Ave Maria i.e., Ave Maria and Steward Global go up and down completely randomly.

Pair Corralation between Ave Maria and Steward Global

Assuming the 90 days horizon Ave Maria Rising is expected to generate 1.02 times more return on investment than Steward Global. However, Ave Maria is 1.02 times more volatile than Steward Global E. It trades about 0.1 of its potential returns per unit of risk. Steward Global E is currently generating about 0.05 per unit of risk. If you would invest  2,415  in Ave Maria Rising on September 13, 2024 and sell it today you would earn a total of  104.00  from holding Ave Maria Rising or generate 4.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ave Maria Rising  vs.  Steward Global E

Ave Maria Rising

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ave Maria Rising are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Ave Maria is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Steward Global E

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Steward Global E are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Steward Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ave Maria and Steward Global

The main advantage of trading using opposite Ave Maria and Steward Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ave Maria position performs unexpectedly, Steward 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 Steward Global will offset losses from the drop in Steward Global's long position.

The idea behind Ave Maria Rising and Steward Global E pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.