Correlation Between Stepstone and Golub Capital
Can any of the company-specific risk be diversified away by investing in both Stepstone and Golub Capital 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 Golub Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Golub Capital BDC, you can compare the effects of market volatilities on Stepstone and Golub Capital 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 Golub Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Golub Capital.
Diversification Opportunities for Stepstone and Golub Capital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stepstone and Golub is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Golub Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golub Capital BDC 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 Golub Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golub Capital BDC has no effect on the direction of Stepstone i.e., Stepstone and Golub Capital go up and down completely randomly.
Pair Corralation between Stepstone and Golub Capital
Given the investment horizon of 90 days Stepstone Group is expected to generate 3.41 times more return on investment than Golub Capital. However, Stepstone is 3.41 times more volatile than Golub Capital BDC. It trades about 0.14 of its potential returns per unit of risk. Golub Capital BDC is currently generating about -0.04 per unit of risk. If you would invest 6,158 in Stepstone Group on August 27, 2024 and sell it today you would earn a total of 547.00 from holding Stepstone Group or generate 8.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Golub Capital BDC
Performance |
| Timeline |
| Stepstone Group |
| Golub Capital BDC |
Stepstone and Golub Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Golub Capital
The main advantage of trading using opposite Stepstone and Golub Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Golub Capital 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 Golub Capital will offset losses from the drop in Golub Capital's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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