Correlation Between Stepstone and Constellation Brands
Can any of the company-specific risk be diversified away by investing in both Stepstone and Constellation Brands 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 Constellation Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stepstone Group and Constellation Brands Class, you can compare the effects of market volatilities on Stepstone and Constellation Brands 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 Constellation Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stepstone and Constellation Brands.
Diversification Opportunities for Stepstone and Constellation Brands
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stepstone and Constellation is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Stepstone Group and Constellation Brands Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellation Brands 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 Constellation Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellation Brands has no effect on the direction of Stepstone i.e., Stepstone and Constellation Brands go up and down completely randomly.
Pair Corralation between Stepstone and Constellation Brands
Given the investment horizon of 90 days Stepstone Group is expected to under-perform the Constellation Brands. In addition to that, Stepstone is 1.5 times more volatile than Constellation Brands Class. It trades about -0.21 of its total potential returns per unit of risk. Constellation Brands Class is currently generating about 0.03 per unit of volatility. If you would invest 23,829 in Constellation Brands Class on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Constellation Brands Class or generate 0.67% 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. Constellation Brands Class
Performance |
| Timeline |
| Stepstone Group |
| Constellation Brands |
Stepstone and Constellation Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stepstone and Constellation Brands
The main advantage of trading using opposite Stepstone and Constellation Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stepstone position performs unexpectedly, Constellation Brands 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 Constellation Brands will offset losses from the drop in Constellation Brands' long position.| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
| Constellation Brands vs. Brown Forman | Constellation Brands vs. Duckhorn Portfolio | Constellation Brands vs. MGP Ingredients | Constellation Brands vs. Brown Forman |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |