Correlation Between Focus Financial and Stepstone
Can any of the company-specific risk be diversified away by investing in both Focus Financial and Stepstone 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 Focus Financial and Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Financial Partners and Stepstone Group, you can compare the effects of market volatilities on Focus Financial and Stepstone 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 Focus Financial with a short position of Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Financial and Stepstone.
Diversification Opportunities for Focus Financial and Stepstone
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Focus and Stepstone is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Focus Financial Partners and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and Focus Financial 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 Focus Financial Partners are associated (or correlated) with Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Focus Financial i.e., Focus Financial and Stepstone go up and down completely randomly.
Pair Corralation between Focus Financial and Stepstone
If you would invest 6,158 in Stepstone Group on August 27, 2024 and sell it today you would earn a total of 547.00 from holding Stepstone Group or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Focus Financial Partners vs. Stepstone Group
Performance |
| Timeline |
| Focus Financial Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Stepstone Group |
Focus Financial and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Financial and Stepstone
The main advantage of trading using opposite Focus Financial and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Financial position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Focus Financial vs. Federated Premier Municipal | Focus Financial vs. Blackrock Muniyield | Focus Financial vs. Diamond Hill Investment | Focus Financial vs. NXG NextGen Infrastructure |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |