Correlation Between Stepstone and Barings BDC
Can any of the company-specific risk be diversified away by investing in both Stepstone and Barings BDC 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 Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Barings BDC, you can compare the effects of market volatilities on Stepstone and Barings BDC 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 Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Barings BDC.
Diversification Opportunities for Stepstone and Barings BDC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Stepstone and Barings is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC 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 Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of Stepstone i.e., Stepstone and Barings BDC go up and down completely randomly.
Pair Corralation between Stepstone and Barings BDC
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.84 times more return on investment than Barings BDC. However, Stepstone is 1.84 times more volatile than Barings BDC. It trades about 0.09 of its potential returns per unit of risk. Barings BDC is currently generating about 0.07 per unit of risk. If you would invest 2,702 in Stepstone Group on September 2, 2024 and sell it today you would earn a total of 3,887 from holding Stepstone Group or generate 143.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Barings BDC
Performance |
| Timeline |
| Stepstone Group |
| Barings BDC |
Stepstone and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Barings BDC
The main advantage of trading using opposite Stepstone and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Barings BDC vs. Visa Class A | Barings BDC vs. Diamond Hill Investment | Barings BDC vs. Distoken Acquisition | Barings BDC vs. Associated Capital Group |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |