Correlation Between Stepstone and Stratasys
Can any of the company-specific risk be diversified away by investing in both Stepstone and Stratasys 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 Stratasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Stratasys, you can compare the effects of market volatilities on Stepstone and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Stratasys.
Diversification Opportunities for Stepstone and Stratasys
Poor diversification
The 3 months correlation between Stepstone and Stratasys is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of Stepstone i.e., Stepstone and Stratasys go up and down completely randomly.
Pair Corralation between Stepstone and Stratasys
Given the investment horizon of 90 days Stepstone is expected to generate 2.58 times less return on investment than Stratasys. But when comparing it to its historical volatility, Stepstone Group is 2.04 times less risky than Stratasys. It trades about 0.19 of its potential returns per unit of risk. Stratasys is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 733.00 in Stratasys on September 2, 2024 and sell it today you would earn a total of 229.00 from holding Stratasys or generate 31.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stepstone Group vs. Stratasys
Performance |
| Timeline |
| Stepstone Group |
| Stratasys |
Stepstone and Stratasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Stratasys
The main advantage of trading using opposite Stepstone and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Stratasys vs. Nano Dimension | Stratasys vs. IONQ Inc | Stratasys vs. D Wave Quantum | Stratasys vs. Desktop Metal |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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