Correlation Between Stepstone and Duluth Holdings
Can any of the company-specific risk be diversified away by investing in both Stepstone and Duluth Holdings 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 Duluth Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Duluth Holdings, you can compare the effects of market volatilities on Stepstone and Duluth Holdings 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 Duluth Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Duluth Holdings.
Diversification Opportunities for Stepstone and Duluth Holdings
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stepstone and Duluth is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Duluth Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duluth Holdings 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 Duluth Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duluth Holdings has no effect on the direction of Stepstone i.e., Stepstone and Duluth Holdings go up and down completely randomly.
Pair Corralation between Stepstone and Duluth Holdings
Given the investment horizon of 90 days Stepstone Group is expected to generate 0.7 times more return on investment than Duluth Holdings. However, Stepstone Group is 1.43 times less risky than Duluth Holdings. It trades about 0.16 of its potential returns per unit of risk. Duluth Holdings is currently generating about 0.02 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. Duluth Holdings
Performance |
| Timeline |
| Stepstone Group |
| Duluth Holdings |
Stepstone and Duluth Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Duluth Holdings
The main advantage of trading using opposite Stepstone and Duluth Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Duluth Holdings 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 Duluth Holdings will offset losses from the drop in Duluth Holdings' long position.| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. Associated Capital Group |
| Duluth Holdings vs. Capri Holdings | Duluth Holdings vs. Movado Group | Duluth Holdings vs. Tapestry | Duluth Holdings vs. Brilliant Earth 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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