Correlation Between Stepstone and Neogen
Can any of the company-specific risk be diversified away by investing in both Stepstone and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Neogen, you can compare the effects of market volatilities on Stepstone and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Neogen.
Diversification Opportunities for Stepstone and Neogen
Very weak diversification
The 3 months correlation between Stepstone and Neogen is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Stepstone i.e., Stepstone and Neogen go up and down completely randomly.
Pair Corralation between Stepstone and Neogen
Given the investment horizon of 90 days Stepstone Group is expected to generate 0.8 times more return on investment than Neogen. However, Stepstone Group is 1.25 times less risky than Neogen. It trades about 0.11 of its potential returns per unit of risk. Neogen is currently generating about -0.04 per unit of risk. If you would invest 3,561 in Stepstone Group on November 5, 2024 and sell it today you would earn a total of 2,744 from holding Stepstone Group or generate 77.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Neogen
Performance |
| Timeline |
| Stepstone Group |
| Neogen |
Stepstone and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Neogen
The main advantage of trading using opposite Stepstone and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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