Correlation Between Steward Ered and Steward Covered

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

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

Diversification Opportunities for Steward Ered and Steward Covered

1.0

Correlation Coefficient

Steward Ered  Steward Covered

No risk reduction

The 3 months correlation between Steward and Steward is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Steward Ered Call and Steward Ered Call in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steward Ered Call and Steward Ered 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 Ered Call are associated (or correlated) with Steward Covered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steward Ered Call has no effect on the direction of Steward Ered i.e., Steward Ered and Steward Covered go up and down completely randomly.

Pair Corralation between Steward Ered and Steward Covered

Assuming the 90 days horizon Steward Ered Call is expected to generate 0.97 times more return on investment than Steward Covered. However, Steward Ered Call is 1.03 times less risky than Steward Covered. It trades about 0.28 of its potential returns per unit of risk. Steward Ered Call is currently generating about 0.24 per unit of risk. If you would invest  721.00  in Steward Ered Call on April 29, 2025 and sell it today you would earn a total of  59.00  from holding Steward Ered Call or generate 8.18% return on investment over 90 days.

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

Steward Ered Call  vs.  Steward Ered Call

Steward Ered Call

Risk-Adjusted Performance

Solid

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

Steward Ered Call

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Steward Ered Call are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Steward Covered may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Steward Ered and Steward Covered

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

The idea behind Steward Ered Call and Steward Ered Call 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.