Correlation Between US Global and Stepstone
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Stepstone Group, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Stepstone.
Diversification Opportunities for US Global and Stepstone
Excellent diversification
The 3 months correlation between GROW and Stepstone is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and US Global 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 US Global Investors 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 US Global i.e., US Global and Stepstone go up and down completely randomly.
Pair Corralation between US Global and Stepstone
Given the investment horizon of 90 days US Global Investors is expected to under-perform the Stepstone. But the stock apears to be less risky and, when comparing its historical volatility, US Global Investors is 1.88 times less risky than Stepstone. The stock trades about -0.04 of its potential returns per unit of risk. The Stepstone Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 5,344 in Stepstone Group on August 23, 2024 and sell it today you would earn a total of 1,257 from holding Stepstone Group or generate 23.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Stepstone Group
Performance |
| Timeline |
| US Global Investors |
| Stepstone Group |
US Global and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Stepstone
The main advantage of trading using opposite US Global and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
| 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |