Correlation Between Stepstone and Blackstone
Can any of the company-specific risk be diversified away by investing in both Stepstone and Blackstone 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 Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Blackstone Group, you can compare the effects of market volatilities on Stepstone and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Blackstone.
Diversification Opportunities for Stepstone and Blackstone
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stepstone and Blackstone is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Stepstone i.e., Stepstone and Blackstone go up and down completely randomly.
Pair Corralation between Stepstone and Blackstone
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.16 times more return on investment than Blackstone. However, Stepstone is 1.16 times more volatile than Blackstone Group. It trades about 0.04 of its potential returns per unit of risk. Blackstone Group is currently generating about -0.2 per unit of risk. If you would invest 6,157 in Stepstone Group on November 18, 2024 and sell it today you would earn a total of 90.00 from holding Stepstone Group or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Blackstone Group
Performance |
| Timeline |
| Stepstone Group |
| Blackstone Group |
Stepstone and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Blackstone
The main advantage of trading using opposite Stepstone and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Blackstone vs. T Rowe Price | Blackstone vs. State Street Corp | Blackstone vs. KKR Co LP | Blackstone vs. Brookfield Asset Management |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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