Correlation Between Stepstone and Fenbo Holdings
Can any of the company-specific risk be diversified away by investing in both Stepstone and Fenbo 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 Fenbo 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 Fenbo Holdings Limited, you can compare the effects of market volatilities on Stepstone and Fenbo 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 Fenbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Fenbo Holdings.
Diversification Opportunities for Stepstone and Fenbo Holdings
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepstone and Fenbo is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Fenbo Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fenbo 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 Fenbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fenbo Holdings has no effect on the direction of Stepstone i.e., Stepstone and Fenbo Holdings go up and down completely randomly.
Pair Corralation between Stepstone and Fenbo Holdings
Given the investment horizon of 90 days Stepstone Group is expected to generate 0.22 times more return on investment than Fenbo Holdings. However, Stepstone Group is 4.53 times less risky than Fenbo Holdings. It trades about 0.16 of its potential returns per unit of risk. Fenbo Holdings Limited is currently generating about -0.18 per unit of risk. If you would invest 5,683 in Stepstone Group on August 30, 2024 and sell it today you would earn a total of 921.00 from holding Stepstone Group or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Stepstone Group vs. Fenbo Holdings Limited
Performance |
| Timeline |
| Stepstone Group |
| Fenbo Holdings |
Stepstone and Fenbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Fenbo Holdings
The main advantage of trading using opposite Stepstone and Fenbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Fenbo 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 Fenbo Holdings will offset losses from the drop in Fenbo Holdings' long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Fenbo Holdings vs. Beyond Meat | Fenbo Holdings vs. Albertsons Companies | Fenbo Holdings vs. BBB Foods | Fenbo Holdings vs. BCE Inc |
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.
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