Correlation Between Cornerstone Strategic and Cavanal Hill

Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic and Cavanal Hill 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 Cornerstone Strategic and Cavanal Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cornerstone Strategic Value and Cavanal Hill Hedged, you can compare the effects of market volatilities on Cornerstone Strategic and Cavanal Hill 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 Cornerstone Strategic with a short position of Cavanal Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Cavanal Hill.

Diversification Opportunities for Cornerstone Strategic and Cavanal Hill

0.92

Correlation Coefficient

Cornerstone Strategic  Cavanal Hill

Almost no diversification

The 3 months correlation between Cornerstone and Cavanal is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Cavanal Hill Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cavanal Hill Hedged and Cornerstone Strategic 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 Cornerstone Strategic Value are associated (or correlated) with Cavanal Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cavanal Hill Hedged has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Cavanal Hill go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Cavanal Hill

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to generate 1.51 times more return on investment than Cavanal Hill. However, Cornerstone Strategic is 1.51 times more volatile than Cavanal Hill Hedged. It trades about 0.29 of its potential returns per unit of risk. Cavanal Hill Hedged is currently generating about 0.28 per unit of risk. If you would invest  710.00  in Cornerstone Strategic Value on May 16, 2025 and sell it today you would earn a total of  110.00  from holding Cornerstone Strategic Value or generate 15.49% return on investment over 90 days.

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

Cornerstone Strategic Value  vs.  Cavanal Hill Hedged

Cornerstone Strategic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak essential indicators, Cornerstone Strategic displayed solid returns over the last few months and may actually be approaching a breakup point.

Cavanal Hill Hedged

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cavanal Hill Hedged are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Cavanal Hill may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Cornerstone Strategic and Cavanal Hill

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

The idea behind Cornerstone Strategic Value and Cavanal Hill Hedged 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.