Correlation Between Crossmark Steward and Morningstar International

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

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

Diversification Opportunities for Crossmark Steward and Morningstar International

0.88

Correlation Coefficient

Crossmark Steward  Morningstar International

Very poor diversification

The 3 months correlation between Crossmark and Morningstar is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Crossmark Steward Equity and Morningstar International Equi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar International and Crossmark Steward 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 Crossmark Steward Equity are associated (or correlated) with Morningstar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar International has no effect on the direction of Crossmark Steward i.e., Crossmark Steward and Morningstar International go up and down completely randomly.

Pair Corralation between Crossmark Steward and Morningstar International

Assuming the 90 days horizon Crossmark Steward Equity is expected to generate 0.48 times more return on investment than Morningstar International. However, Crossmark Steward Equity is 2.09 times less risky than Morningstar International. It trades about 0.02 of its potential returns per unit of risk. Morningstar International Equity is currently generating about -0.41 per unit of risk. If you would invest  2,729  in Crossmark Steward Equity on October 11, 2024 and sell it today you would earn a total of  5.00  from holding Crossmark Steward Equity or generate 0.18% return on investment over 90 days.

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

Crossmark Steward Equity  vs.  Morningstar International Equi

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 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.

Morningstar International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morningstar International Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental 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 Crossmark Steward and Morningstar International

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

The idea behind Crossmark Steward Equity and Morningstar International 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.