Correlation Between Stepstone and Agriculture Natural
Can any of the company-specific risk be diversified away by investing in both Stepstone and Agriculture Natural 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 Stepstone and Agriculture Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Agriculture Natural Solutions, you can compare the effects of market volatilities on Stepstone and Agriculture Natural 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 Stepstone with a short position of Agriculture Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Agriculture Natural.
Diversification Opportunities for Stepstone and Agriculture Natural
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stepstone and Agriculture is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Agriculture Natural Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agriculture Natural and Stepstone 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 Stepstone Group are associated (or correlated) with Agriculture Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agriculture Natural has no effect on the direction of Stepstone i.e., Stepstone and Agriculture Natural go up and down completely randomly.
Pair Corralation between Stepstone and Agriculture Natural
Given the investment horizon of 90 days Stepstone is expected to generate 5.28 times less return on investment than Agriculture Natural. But when comparing it to its historical volatility, Stepstone Group is 2.56 times less risky than Agriculture Natural. It trades about 0.14 of its potential returns per unit of risk. Agriculture Natural Solutions is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Agriculture Natural Solutions on August 23, 2024 and sell it today you would earn a total of 12.00 from holding Agriculture Natural Solutions or generate 46.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.96% |
| Values | Daily Returns |
Stepstone Group vs. Agriculture Natural Solutions
Performance |
| Timeline |
| Stepstone Group |
| Agriculture Natural |
Stepstone and Agriculture Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Agriculture Natural
The main advantage of trading using opposite Stepstone and Agriculture Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Agriculture Natural 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 Agriculture Natural will offset losses from the drop in Agriculture Natural's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Agriculture Natural vs. ABIVAX Socit Anonyme | Agriculture Natural vs. SCOR PK | Agriculture Natural vs. HUMANA INC | Agriculture Natural vs. Aquagold International |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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