Correlation Between Stepstone and Atec
Can any of the company-specific risk be diversified away by investing in both Stepstone and Atec 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 Atec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Atec Inc, you can compare the effects of market volatilities on Stepstone and Atec 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 Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Atec.
Diversification Opportunities for Stepstone and Atec
Poor diversification
The 3 months correlation between Stepstone and Atec is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Atec Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec Inc 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 Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec Inc has no effect on the direction of Stepstone i.e., Stepstone and Atec go up and down completely randomly.
Pair Corralation between Stepstone and Atec
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.32 times more return on investment than Atec. However, Stepstone is 1.32 times more volatile than Atec Inc. It trades about 0.1 of its potential returns per unit of risk. Atec Inc is currently generating about 0.05 per unit of risk. If you would invest 2,380 in Stepstone Group on September 14, 2024 and sell it today you would earn a total of 3,821 from holding Stepstone Group or generate 160.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Stepstone Group vs. Atec Inc
Performance |
| Timeline |
| Stepstone Group |
| Atec Inc |
Stepstone and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Atec
The main advantage of trading using opposite Stepstone and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. AllianceBernstein Holding LP |
| Atec vs. China Clean Energy | Atec vs. Amkor Technology | Atec vs. Stepstone Group | Atec vs. Everspin Technologies |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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