Correlation Between Short Duration and Crossmark Steward

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

By analyzing existing cross correlation between Short Duration Inflation and Crossmark Steward Equity, you can compare the effects of market volatilities on Short Duration and Crossmark Steward 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 Short Duration with a short position of Crossmark Steward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Duration and Crossmark Steward.

Diversification Opportunities for Short Duration and Crossmark Steward

0.66

Correlation Coefficient

Short Duration  Crossmark Steward

Poor diversification

The 3 months correlation between Short and Crossmark is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Short Duration Inflation and Crossmark Steward Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossmark Steward Equity and Short Duration 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 Short Duration Inflation are associated (or correlated) with Crossmark Steward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossmark Steward Equity has no effect on the direction of Short Duration i.e., Short Duration and Crossmark Steward go up and down completely randomly.

Pair Corralation between Short Duration and Crossmark Steward

Assuming the 90 days horizon Short Duration Inflation is expected to generate 0.21 times more return on investment than Crossmark Steward. However, Short Duration Inflation is 4.65 times less risky than Crossmark Steward. It trades about 0.4 of its potential returns per unit of risk. Crossmark Steward Equity is currently generating about 0.04 per unit of risk. If you would invest  1,025  in Short Duration Inflation on December 22, 2024 and sell it today you would earn a total of  31.00  from holding Short Duration Inflation or generate 3.02% return on investment over 90 days.

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

Short Duration Inflation  vs.  Crossmark Steward Equity

Short Duration Inflation

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Short Duration Inflation are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Short Duration is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Crossmark Steward Equity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Crossmark Steward Equity are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Crossmark Steward is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Short Duration and Crossmark Steward

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

The idea behind Short Duration Inflation and Crossmark Steward Equity 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.