Correlation Between Stepstone and Bluerock Homes
Can any of the company-specific risk be diversified away by investing in both Stepstone and Bluerock Homes 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 Bluerock Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Bluerock Homes Trust, you can compare the effects of market volatilities on Stepstone and Bluerock Homes 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 Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Bluerock Homes.
Diversification Opportunities for Stepstone and Bluerock Homes
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stepstone and Bluerock is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust 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 Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Stepstone i.e., Stepstone and Bluerock Homes go up and down completely randomly.
Pair Corralation between Stepstone and Bluerock Homes
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.02 times more return on investment than Bluerock Homes. However, Stepstone is 1.02 times more volatile than Bluerock Homes Trust. It trades about 0.16 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.06 per unit of risk. If you would invest 4,425 in Stepstone Group on September 1, 2024 and sell it today you would earn a total of 2,164 from holding Stepstone Group or generate 48.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Bluerock Homes Trust
Performance |
| Timeline |
| Stepstone Group |
| Bluerock Homes Trust |
Stepstone and Bluerock Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Bluerock Homes
The main advantage of trading using opposite Stepstone and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Bluerock Homes 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 Bluerock Homes will offset losses from the drop in Bluerock Homes' long position.| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. Associated Capital Group |
| Bluerock Homes vs. Re Max Holding | Bluerock Homes vs. Marcus Millichap | Bluerock Homes vs. Frp Holdings Ord | Bluerock Homes vs. Maui Land Pineapple |
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 CEOs Directory module to screen CEOs from public companies around the world.
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