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

Steward Small  Steward Select

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

If you would invest  1,133  in Steward Small Mid Cap on September 12, 2024 and sell it today you would earn a total of  132.00  from holding Steward Small Mid Cap or generate 11.65% 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

Steward Small Mid

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Steward Small Mid Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Steward Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Steward Select Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steward Select Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Steward Select is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

The idea behind Steward Small Mid Cap and Steward Select Bond 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.