Correlation Between Stepstone and Exchange Bankshares
Can any of the company-specific risk be diversified away by investing in both Stepstone and Exchange Bankshares 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 Exchange Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Exchange Bankshares, you can compare the effects of market volatilities on Stepstone and Exchange Bankshares 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 Exchange Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Exchange Bankshares.
Diversification Opportunities for Stepstone and Exchange Bankshares
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stepstone and Exchange is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Exchange Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Bankshares 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 Exchange Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bankshares has no effect on the direction of Stepstone i.e., Stepstone and Exchange Bankshares go up and down completely randomly.
Pair Corralation between Stepstone and Exchange Bankshares
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.76 times more return on investment than Exchange Bankshares. However, Stepstone is 1.76 times more volatile than Exchange Bankshares. It trades about 0.11 of its potential returns per unit of risk. Exchange Bankshares is currently generating about 0.09 per unit of risk. If you would invest 3,561 in Stepstone Group on November 5, 2024 and sell it today you would earn a total of 2,744 from holding Stepstone Group or generate 77.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.42% |
| Values | Daily Returns |
Stepstone Group vs. Exchange Bankshares
Performance |
| Timeline |
| Stepstone Group |
| Exchange Bankshares |
Stepstone and Exchange Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Exchange Bankshares
The main advantage of trading using opposite Stepstone and Exchange Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Exchange Bankshares 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 Exchange Bankshares will offset losses from the drop in Exchange Bankshares' long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Exchange Bankshares vs. First Community Financial | Exchange Bankshares vs. National Capital Bank | Exchange Bankshares vs. Oakworth Capital | Exchange Bankshares vs. Truxton |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |