Correlation Between Stepstone and Mill City
Can any of the company-specific risk be diversified away by investing in both Stepstone and Mill City 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 Mill City into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Mill City Ventures, you can compare the effects of market volatilities on Stepstone and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Mill City.
Diversification Opportunities for Stepstone and Mill City
Pay attention - limited upside
The 3 months correlation between Stepstone and Mill is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of Stepstone i.e., Stepstone and Mill City go up and down completely randomly.
Pair Corralation between Stepstone and Mill City
Given the investment horizon of 90 days Stepstone is expected to generate 44.09 times less return on investment than Mill City. But when comparing it to its historical volatility, Stepstone Group is 59.41 times less risky than Mill City. It trades about 0.15 of its potential returns per unit of risk. Mill City Ventures is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Mill City Ventures on September 2, 2024 and sell it today you would lose (72.00) from holding Mill City Ventures or give up 26.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Stepstone Group vs. Mill City Ventures
Performance |
| Timeline |
| Stepstone Group |
| Mill City Ventures |
Stepstone and Mill City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Mill City
The main advantage of trading using opposite Stepstone and Mill City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Mill City 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 Mill City will offset losses from the drop in Mill City's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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