Correlation Between Stepstone and Keurig Dr
Can any of the company-specific risk be diversified away by investing in both Stepstone and Keurig Dr 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 Keurig Dr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Keurig Dr Pepper, you can compare the effects of market volatilities on Stepstone and Keurig Dr 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 Keurig Dr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Keurig Dr.
Diversification Opportunities for Stepstone and Keurig Dr
Pay attention - limited upside
The 3 months correlation between Stepstone and Keurig is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Keurig Dr Pepper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keurig Dr Pepper 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 Keurig Dr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keurig Dr Pepper has no effect on the direction of Stepstone i.e., Stepstone and Keurig Dr go up and down completely randomly.
Pair Corralation between Stepstone and Keurig Dr
Given the investment horizon of 90 days Stepstone Group is expected to generate 1.82 times more return on investment than Keurig Dr. However, Stepstone is 1.82 times more volatile than Keurig Dr Pepper. It trades about 0.16 of its potential returns per unit of risk. Keurig Dr Pepper is currently generating about -0.16 per unit of risk. If you would invest 5,379 in Stepstone Group on September 2, 2024 and sell it today you would earn a total of 1,210 from holding Stepstone Group or generate 22.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Keurig Dr Pepper
Performance |
| Timeline |
| Stepstone Group |
| Keurig Dr Pepper |
Stepstone and Keurig Dr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Keurig Dr
The main advantage of trading using opposite Stepstone and Keurig Dr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Keurig Dr 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 Keurig Dr will offset losses from the drop in Keurig Dr'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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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