Correlation Between Stepstone and Nextplat Corp
Can any of the company-specific risk be diversified away by investing in both Stepstone and Nextplat 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 Nextplat 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 Nextplat Corp, you can compare the effects of market volatilities on Stepstone and Nextplat 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 Nextplat Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Nextplat Corp.
Diversification Opportunities for Stepstone and Nextplat Corp
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stepstone and Nextplat is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Nextplat Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextplat 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 Nextplat Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextplat Corp has no effect on the direction of Stepstone i.e., Stepstone and Nextplat Corp go up and down completely randomly.
Pair Corralation between Stepstone and Nextplat Corp
Given the investment horizon of 90 days Stepstone Group is expected to generate 0.4 times more return on investment than Nextplat Corp. However, Stepstone Group is 2.48 times less risky than Nextplat Corp. It trades about 0.16 of its potential returns per unit of risk. Nextplat Corp is currently generating about -0.18 per unit of risk. If you would invest 6,013 in Stepstone Group on September 1, 2024 and sell it today you would earn a total of 576.00 from holding Stepstone Group or generate 9.58% 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. Nextplat Corp
Performance |
| Timeline |
| Stepstone Group |
| Nextplat Corp |
Stepstone and Nextplat Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Nextplat Corp
The main advantage of trading using opposite Stepstone and Nextplat Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Nextplat 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 Nextplat Corp will offset losses from the drop in Nextplat Corp's long position.| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. Associated Capital Group |
| Nextplat Corp vs. Ke Holdings | Nextplat Corp vs. nCino Inc | Nextplat Corp vs. Kingsoft Cloud Holdings | Nextplat Corp vs. Jfrog |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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