Correlation Between Stepstone and Joint Corp
Can any of the company-specific risk be diversified away by investing in both Stepstone and Joint Corp 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 Joint Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and The Joint Corp, you can compare the effects of market volatilities on Stepstone and Joint Corp 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 Joint Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Joint Corp.
Diversification Opportunities for Stepstone and Joint Corp
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stepstone and Joint is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and The Joint Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Corp 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 Joint Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Corp has no effect on the direction of Stepstone i.e., Stepstone and Joint Corp go up and down completely randomly.
Pair Corralation between Stepstone and Joint Corp
Given the investment horizon of 90 days Stepstone Group is expected to generate 0.56 times more return on investment than Joint Corp. However, Stepstone Group is 1.8 times less risky than Joint Corp. It trades about 0.14 of its potential returns per unit of risk. The Joint Corp is currently generating about 0.01 per unit of risk. If you would invest 2,388 in Stepstone Group on August 31, 2024 and sell it today you would earn a total of 4,201 from holding Stepstone Group or generate 175.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. The Joint Corp
Performance |
| Timeline |
| Stepstone Group |
| Joint Corp |
Stepstone and Joint Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Joint Corp
The main advantage of trading using opposite Stepstone and Joint Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Joint Corp 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 Joint Corp will offset losses from the drop in Joint Corp'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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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