Correlation Between Tax Managed and Crossmark Steward

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

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

Diversification Opportunities for Tax Managed and Crossmark Steward

-0.11

Correlation Coefficient

Tax Managed  Crossmark Steward

Good diversification

The 3 months correlation between Tax and Crossmark is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tax Managed Mid Small 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 Tax Managed 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 Tax Managed Mid Small 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 Tax Managed i.e., Tax Managed and Crossmark Steward go up and down completely randomly.

Pair Corralation between Tax Managed and Crossmark Steward

Assuming the 90 days horizon Tax Managed Mid Small is expected to under-perform the Crossmark Steward. In addition to that, Tax Managed is 1.4 times more volatile than Crossmark Steward Equity. It trades about -0.27 of its total potential returns per unit of risk. Crossmark Steward Equity is currently generating about -0.19 per unit of volatility. If you would invest  2,817  in Crossmark Steward Equity on October 8, 2024 and sell it today you would lose (91.00) from holding Crossmark Steward Equity or give up 3.23% of portfolio value over 90 days.

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

Tax Managed Mid Small  vs.  Crossmark Steward Equity

Tax Managed Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tax Managed Mid Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tax Managed 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

0 of 100

Very Weak

Over the last 90 days Crossmark Steward Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Tax Managed and Crossmark Steward

The main advantage of trading using opposite Tax Managed and Crossmark Steward positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax Managed 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 Tax Managed Mid Small 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.