Correlation Between Steward International and Steward Global
Can any of the company-specific risk be diversified away by investing in both Steward International 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 Steward International and Steward Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steward International Enhanced and Steward Global Equity, you can compare the effects of market volatilities on Steward International 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 Steward International with a short position of Steward Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steward International and Steward Global.
Diversification Opportunities for Steward International and Steward Global
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steward and Steward is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Steward International Enhanced and Steward Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Global Equity and Steward International 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 International Enhanced 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 Equity has no effect on the direction of Steward International i.e., Steward International and Steward Global go up and down completely randomly.
Pair Corralation between Steward International and Steward Global
Assuming the 90 days horizon Steward International Enhanced is expected to under-perform the Steward Global. In addition to that, Steward International is 1.1 times more volatile than Steward Global Equity. It trades about -0.08 of its total potential returns per unit of risk. Steward Global Equity is currently generating about 0.03 per unit of volatility. If you would invest 3,683 in Steward Global Equity on September 5, 2024 and sell it today you would earn a total of 33.00 from holding Steward Global Equity or generate 0.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Steward International Enhanced vs. Steward Global Equity
Performance |
Timeline |
Steward International |
Steward Global Equity |
Steward International and Steward Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Steward International and Steward Global
The main advantage of trading using opposite Steward International and Steward Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steward International 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.Steward International vs. Morningstar Aggressive Growth | Steward International vs. Ab Global Risk | Steward International vs. Calvert High Yield | Steward International vs. Gmo High Yield |
Steward Global vs. Steward Small Mid Cap | Steward Global vs. Steward Large Cap | Steward Global vs. Steward International Enhanced | Steward Global vs. Steward Select Bond |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance |